#CryptoCPIWatch *U.S. Inflation Cools to 2.3% in April, Boosting Rate Cut Expectations*

The U.S. Consumer Price Index (CPI) rose by 2.3% year-over-year in April, down from 2.4% in March, marking the lowest annual inflation rate since February 2021. This unexpected slowdown has bolstered investor confidence and increased expectations for potential interest rate cuts by the Federal Reserve.

*Market Reactions:*

- *S&P 500*: Gained 0.8%, erasing its 2025 losses.

- *Nasdaq Composite*: Rose by 2.17%, led by strong performances in tech stocks.

- *U.S. Treasury Yields*: Fell to more than five-week lows, with the 10-year yield dropping to 4.34%.

- *U.S. Dollar*: Declined against major currencies, reaching a one-month low.

*Federal Reserve Outlook:*

The cooling inflation data has led to increased speculation about potential interest rate cuts. Markets are now pricing in an 85% likelihood of a 25-basis point rate cut at the Fed's next meeting.

*Implications for Cryptocurrency:*

Lower interest rates can lead to increased liquidity in the markets, which often benefits risk-on assets like cryptocurrencies. Investors may see this as a bullish signal for digital assets such as Bitcoin and Ethereum.