Inflation Index Sees 13-Year High, U.S. Stock Market's Four Major Indices Slightly Down, Ether Falls Below $1,900

In June, the Consumer Price Index (CPI) in the United States expanded at the fastest pace since 2008, with a monthly increase of 0.9% and a year-on-year increase of 5.4%. The core CPI index also reached a 29-year high. The major U.S. stock indices experienced a slight decline, and Bitcoin also dropped below the $32,000 mark.

Inflation Stronger Than Expected

During a hearing of the U.S. House of Representatives COVID-19 Select Subcommittee on June 22, Federal Reserve Chair Jerome Powell stated:

Although inflation has been stronger and more persistent than expected, as the economy reopens and time passes, these issues will be resolved. Inflation is temporary and unlikely to repeat the inflation disasters of the 1970s.

However, according to the latest data from the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor, the U.S. Consumer Price Index (CPI) in June saw the highest year-over-year increase in 13 years, rising by 1% from May, with the core CPI index also reaching a 4.5% annual increase.

Stocks and Crypto Markets Plunge

Due to the inflation index rising higher than expected, all four major U.S. stock indexes experienced a decline of 0.31% to 0.55%. The top ten cryptocurrencies also saw a drop of 2.2% to 7.9%, with Dogecoin returning to April levels and Ethereum, which is about to undergo the significant "London hard fork" upgrade, falling below $1,900.

The market volatility is also related to the recent "de-Xinjiang-ization" policy implemented by the United States. President Biden added 14 Chinese companies to the trade blacklist last Friday and this week, the State Department, Treasury Department, Commerce Department, Department of Homeland Security, Department of Labor, and the Office of the U.S. Trade Representative jointly released the "Xinjiang Supply Chain Business Advisory Report," emphasizing:

Companies or individuals that do not exit the Xinjiang supply chain or are involved with Xinjiang-related companies and investments may violate U.S. laws.

In early June, former President Trump warned during an interview with Fox Business that stock prices were already too high and cautioned of imminent large-scale inflation.