#CryptoCPIWatch CPI Report: Cooling Inflation or Persistent Pressure? Implications for Markets and Crypto
The upcoming February CPI report, set for release by the U.S. Bureau of Labor Statistics on Wednesday at 12:30 GMT, is poised to influence the direction of Federal Reserve policy, the U.S. dollar, and risk assets like stocks and cryptocurrencies.
Key Expectations & Figures
Headline CPI (YoY): Expected at 2.9%, down from 3.0% in January
Core CPI (YoY): Forecasted at 3.2%, slightly easing from 3.3%
Monthly CPI: Both headline and core CPI anticipated to rise by 0.3% MoM
Analysts from TD Securities note a broad-based deceleration in inflation, citing cooling housing and goods prices as contributing factors.
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Federal Reserve Policy in Focus
The Fed remains cautious, with Chair Jerome Powell emphasizing that more evidence of inflation cooling is needed before rate cuts are considered. Markets have currently priced in 85 basis points of cuts for 2025.
Possible Market Reactions:
CPI below 2.9% → Rate cuts could be accelerated; USD weakens, crypto and stocks rally
CPI above 3.0% → Hawkish Fed stance likely; USD strengthens, risk assets decline
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Trump’s Trade Policies: A New Inflation Wildcard
President Donald Trump’s renewed tariffs on China, Canada, and Mexico may add inflationary pressure through increased import costs and potential supply chain disruptions. While the Fed typically treats tariffs as temporary shocks, a prolonged trade conflict could limit its ability to cut rates.
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Crypto Market: Treading Water Ahead of CPI
Cryptocurrencies remain range-bound, with Bitcoin (BTC) trading near $82,185, down 25% from recent highs, and Ethereum (ETH) at $1,889, posting a 16.2% weekly loss.
Current Sentiment:
BTC: +0.57%
ETH: -1.75%
XRP: +1.6%
DOGE: +2.5%
Solana, Cardano: Slight declines
The latest CoinShares report reveals $876 million in weekly outflows, marking a fourth consecutive week of declining institutional investment in digital assets.
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