The most important macro data today is undoubtedly the CPI released at 8:30. If I were to summarize this data in three words, it would be 'quite good.' However, I believe most viewers are more interested in whether inflation will become a threat to the cryptocurrency market in the future.
Data shows that in April, both core and overall CPI rose by 0.2% month-on-month, slightly lower than the market expectation of 0.3%. Year-on-year, the core CPI remained at 2.8%, in line with expectations, while the overall CPI fell to 2.3%, the lowest since February 2021.
Although Wall Street generally views this as a positive inflation report, one should be cautious of the limitations of short-term benefits — commodity prices are affected by tariffs, and there is significant upward pressure on prices of categories like automobiles in the future, while the current zero growth in new car prices and a 0.5% decline in used car prices show a deflationary trend that contradicts the previous price momentum from consumer buying, leading to uncertainty in future trends.
Sub-item data reveals that the cooling of inflation is not complete: the service sector rose by 0.3% month-on-month, with housing rent-related indicators increasing by 0.3%-0.4%. Although the annual rate of 3.6% is below the annual level of 4%, the slow decline still appears stubborn; in the transportation sector, car insurance has turned from a decline to an increase, while airplane ticket prices plummeted by 2.8%, and medical services maintained a relatively high increase of 0.5%.
This structural difference limits the market's optimistic sentiment. Even the Fed's 'mouthpiece' Nick pointed out that this data is insufficient to change the Fed's wait-and-see policy stance, and inflation management will require longer periods of verification. But one thing is certain: today's significant rise in the cryptocurrency market is closely related to this CPI data.
