#CryptoCPIWatch A K33 report from this week predicts that Trump will implement expansive policies to extend the tax cuts of 2017 and add more tax relief for the American working class, boosting risk assets like Bitcoin.

Weaker-than-expected inflation data in the U.S. helped pause the recent rise in U.S. Treasury bond yields and increased investors' appetite for riskier assets,” reports FXStreet analyst Haresh Menghani.

Menghani further explained that the U.S. Bureau of Labor Statistics reported on Tuesday that the Producer Price Index (PPI), which measures wholesale inflation, rose by 0.2% in December, below the 0.3% expected and the 0.4% from November. The core indicator remained stable during the reported month. This follows the positive monthly U.S. employment report from Friday, making it difficult for investors to project the Federal Reserve's (Fed) next moves on interest rates, which keeps U.S. dollar optimists on the defensive. Meanwhile, risk assets like Bitcoin slightly recovered on Tuesday.

Additionally, FXStreet senior analyst Yohay Elam reports: “After Tuesday's warm-up, the main event awaits us on Wednesday: the first reading of consumer inflation in the United States.”

Elam continued: “The most important figure to keep in mind is the monthly core CPI, which has increased by 0.3% over the last four months. The annualized rate of 0.3% monthly is approximately 3.6%, which is too high. A core inflation rate of 2% is desired, and getting close to that level would allow the Fed to cut interest rates.”

If the Fed decides to cut rates, it would increase the demand for risk assets like Bitcoin and other cryptocurrencies, and investors would start favoring higher-yielding investment products.

Bitcoin is highly correlated with the Nasdaq.