The Latest News - Latest Numbers For CPI

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 Hello McFinancers! We hope that everyone has finished adjusting to the time change in the US due to daylight savings.

The latest in financial news: The release of the year over year CPI numbers were released this week, Ethereum has completed its Dencun update, and Metamask is working with Mastercard to test on-chain cards.

Changes In The CPI

In the past week, the US Bureau of Labor Statistics (BLS) unveiled the latest CPI (Consumer Price Index) figures at 3.2%. This surpassed analysts' expectations, who had forecasted 3.1%. However, Truflation, an independent research firm, presents a contrasting perspective, asserting that the US CPI stands at 1.99%. Notably, Truflation offers a daily CPI update, whereas the BLS calculates and releases its data monthly.

The US CPI serves as a pivotal gauge of inflation for both investors and governmental bodies, providing insights into market fluctuations. Given the Federal Reserve's diligent monitoring of inflation trends, potential adjustments to interest rates loom on the horizon. Since July 2023, CPI rates have oscillated between 3% to 3.7%, coinciding with the last instance of interest rate hikes by the Federal Reserve. Given the Fed's commitment to curbing inflation below 2%, a plausible scenario emerges where interest rates may need upward adjustments to align with this goal. However, it's crucial to acknowledge the lagged effects of interest rate changes on CPI alterations, spanning several months. While intriguing disparities exist between the BLS and Truflation's CPI calculations — 3.2% versus 1.99% — a closer examination reveals consistent upward and downward CPI trends over the past year from both sources. The discrepancy likely stems from variations in the items included in the CPI formulas employed by the BLS and Truflation.

Dencun Update

Over the past week, the Ethereum network underwent significant transformations with the introduction of two major updates. The first, known as the Cancun upgrade, targeted the execution layer, while the second, dubbed the Deneb upgrade, focused on Ethereum's consensus layer. These simultaneous upgrades have been amalgamated into what is now referred to as the Dencun upgrade. One of the key features introduced with this upgrade is proto-danksharding, a technique that consolidates transaction data to mitigate transaction fees on Ethereum's Layer 2 (L2) networks. The Dencun upgrade is expected to enhance the efficiency of L2s and substantially reduce their transaction costs.

Prominent L2s such as Arbitrum, Optimism, Base, and Polygon stand to benefit significantly from these enhancements. Transaction costs on these networks are anticipated to decrease to pennies compared to their previous levels. While the Dencun upgrade dramatically decreases transaction costs for L2 networks, the Ethereum main network will not experience any price reduction. This divergence is likely to drive more investors and web3 users towards L2 networks in pursuit of cost savings on gas fees.

Metamask and Mastercard Work Together

MetaMask and Mastercard have collaborated on testing an on-chain payment card integrated with the Mastercard network. This groundbreaking initiative aims to empower web3 users to utilize their cryptocurrencies for everyday transactions, providing them with enhanced control and accessibility over their funds compared to traditional financial institutions.

Notably, both Mastercard and Visa have forged partnerships with web3 enterprises to facilitate cryptocurrency adoption and interaction. This trend underscores the growing recognition among companies of the advantages offered by blockchain technology. Blockchain's inherent features, such as heightened transaction security and validation, contribute to its appeal. While current transaction speeds may not match those of traditional networks, ongoing upgrades and the emergence of new chains are poised to address this limitation. Moreover, companies are increasingly recognizing the potential of blockchain technology in bolstering transaction security, thereby mitigating risks associated with hacking or fraudulent charges on cards, ultimately leading to cost savings.

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