#CryptoRoundTableRemarks Report on US CPI: Is Inflation Decreasing or Sustained Pressure? What It Means for Markets and Crypto

AI Summary

Key Points:

February CPI inflation is expected to be 2.9% year-on-year, down from 3.0% in January.

Core CPI is expected to be 3.2%, slightly down from 3.3% previously.

The prospect of a decrease in the US Federal Reserve interest rates may change based on CPI data.

Crypto markets, stocks, and fluctuations in the US dollar depend on inflation trends.

US Inflation Data Expected to Decrease, but Risks Remain

The US Bureau of Labor Statistics (BLS) will release the Consumer Price Index (CPI) report for February on Wednesday at 12:30 GMT, providing important insights into inflation trends. Market analysts anticipate a slight decrease in inflation, which could affect Federal Reserve policy, the US dollar, and risk assets such as cryptocurrencies.

The rate of core CPI inflation is expected to reach 2.9% year-on-year (YoY), down from 3.0% in January, marking the first dual decrease in both core inflation and overall inflation since July 2024. The core CPI inflation rate, which excludes food and energy, is projected to drop to 3.2% from 3.3%.

Monthly inflation projections:

Core CPI: +0.3% MoM

Core CPI: +0.3% MoM

Analysts at TD Securities anticipate a broad slowdown in inflation, noting that housing costs and commodity prices may decline, contributing to a loosening trend.

How CPI Data May Influence Federal Reserve Interest Rate Decisions

The Federal Reserve has signaled caution regarding rate cuts, with Chairman Jerome Powell stating last week that economic conditions remain "solid" but inflation must further ease before monetary easing is considered.

Markets have priced in an 85 basis point (bps) rate cut in 2025, but persistent inflation could force the Fed to maintain an aggressive stance. On the other hand, lower inflation could strengthen expectations for rate cuts starting in June or July.

Impact scenario:

CPI more