US CPI Surges to 3.7%, Fueling Rate Hike Debate & Energy Concerns
In August, the seasonally adjusted CPI in the United States rose by an annualized rate of 3.7%, slightly exceeding expectations of 3.6%. This marked the second consecutive increase and reached the highest level since May this year. The seasonally adjusted core CPI in the U.S. for August stood at 4.3%, matching the expectations, but down from the previous month’s 4.7%. This marks the lowest level since September 2021 and continues a six-month downward trend.
According to The Wall Street Journal, the consumer price increase in August was the fastest in over a year, driven by rising energy costs. The monthly core data is likely to keep Federal Reserve officials leaning towards maintaining interest rates at next week’s meeting. However, it won’t resolve the larger debate on whether further rate hikes are needed this year to slow down the economy and sustain recent progress in curbing inflation. The International Energy Agency noted that Saudi Arabia’s decision to extend the crude production cuts until the end of this year could lead to an increase in gasoline prices.
On September 12th, SEC Chairman Gensler announced that they are reviewing the decision on Bitcoin spot exchange-traded fund (ETF) applications and seeking staff recommendations. This follows a court ruling that criticized the SEC for approving futures ETFs while not providing a reason to disapprove a bitcoin spot ETF.
The G20 is advancing an international cryptocurrency framework that will automatically exchange information about cryptocurrency transactions between jurisdictions starting from 2027. The framework, called the Cryptocurrency Asset Reporting Framework (CARF), aims to promote transparency and exchange of information for tax purposes.
Binance US, the American arm of cryptocurrency exchange Binance, has faced recent challenges. Key officials, including the Chief Legal Officer and Chief Risk Officer, have resigned. In addition, Binance US has laid off a third of its staff, and its President has resigned. These developments come after the SEC sued Binance for allegedly operating an unregistered securities exchange.
CoinEx, another cryptocurrency exchange, experienced a hack resulting in the theft of approximately $54 million in funds. However, the exchange has stated that users’ assets are not expected to be affected as the CoinEx User Asset Security Fund will cover all losses.
In the UK, the Financial Conduct Authority (FCA) is implementing new marketing rules for cryptocurrencies. This has prompted Bybit, a cryptocurrency exchange, to consider exiting the UK market. Bybit has expressed its commitment to working with regulators and maintaining its presence in the UK, but negotiations are ongoing.
PayPal has introduced a new feature that allows its customers in the United States to buy and sell supported cryptocurrencies directly within the platform. Users can convert their cryptocurrencies into US dollars and use them for shopping or transfer them to their bank accounts.
Paradigm, a venture capital firm, plans to raise a $1 billion fund to invest in the cryptocurrency space. This comes after the firm removed references to cryptocurrencies from its website and changed its description to a research-driven technology investment firm.
Huobi, a cryptocurrency exchange, has undergone a rebranding with its English name changed to HTX. This follows disputes over the Chinese name for Huobi and a lawsuit filed by one of the parties involved.
These recent developments highlight the ongoing challenges and regulatory scrutiny facing the cryptocurrency industry. While cryptocurrencies continue to gain popularity and adoption, they also face increasing scrutiny and regulation from authorities worldwide. The industry must navigate these challenges to ensure its long-term viability and success.
