The latest inflation data in the U.S. brought relief to financial markets and triggered a rally in #Bitcoin,#Ethereum and the S&P 500.
But beyond the headline, the numbers hide clues that are shifting monetary policy expectations.
📉 Breakdown of the CPI
Core CPI (excluding energy and food): +0.3% monthly (as expected), but above the previous 0.2%.
Annual CPI: 2.7% (better than expected compared to 2.8%).
Overall monthly CPI: +0.2%, in line with projections, down from the previous 0.3%.
💡 What does this mean for the FED?
This data reduces inflationary pressure and leaves the Federal Reserve with fewer arguments to keep rates high.
In concrete terms:
Futures on rates show a 93.9% probability of a cut in September (a month ago it was only 57.4%).
The weakness in the labor market and the scandal from the last employment report strengthen the case for easing monetary policy.
📍 The political context and pressure on Powell
President Trump has openly expressed his desire to see a rate cut before the end of the year.
Now, all attention is on Jerome Powell, who will have the final word in the September meeting… and may possibly leave key hints in Jackson Hole (August 21–23).
🌐 Market reaction
Bitcoin and Ethereum rebound strongly, benefiting from the expectation of cheaper liquidity.
S&P 500 hits intraday highs driven by improved investor sentiment.
📌 With the data in hand, the market is practically pricing in a rate cut.
The question is: will it be enough to spark a new rally in crypto and stocks?