$BTC US-Inflation continues to cool down – Is the path clear for interest rate cuts?

The current CPI data is weaker than expected – and could be the starting signal for the next Bitcoin rally. The US Bureau of Labor Statistics (BLS) has released the current figures for the Consumer Price Index (CPI) for the past month.

Accordingly, inflation in April was below analysts' estimates for the third consecutive time – a bullish signal for the markets and risk assets like Bitcoin and others. Year-on-year, the inflation rate stands at 2.3 percent. A constant rate of 2.4 percent was expected, as in the previous month.

Compared to the previous month, inflation rises by 0.2 percent – and thus also lower than expected by analysts.

The change in the core inflation rate in the US is meanwhile within the range of estimates. Excluding food and energy, the inflation rate is 2.8 percent and remains unchanged compared to the previous month.

This current release marks the smallest increase in the CPI data year-on-year since February 2021. Furthermore, this is the first dataset that takes into account Trump's "reciprocal tariffs" from April 2.

Investor confidence that the US can avoid a strong inflation surge due to Donald Trump's tariff policy is likely to continue to rise.

Such a surge would hinder the currency guardians in loosening their monetary policy. According to the dual mandate of the central bank, it aims for a 2 percent inflation target.

At his press conference following the last interest rate meeting on May 7, Fed Chairman Powell stated that they would continue to wait for incoming inflation, labor market, and growth data before further lowering the interest rate.

A looser monetary policy from the Fed is seen by many crypto analysts as a catalyst for the next market rally.