Wall Street forecasts for US CPI and core CPI suggest crypto markets are recovering 🔥

The CPI inflation data for May will be released by the Stats Bureau hours before the Fed’s rate decision on Wednesday, June 12. The data is crucial after last week’s better-than-expected US jobs data weakened bets on a Fed rate cut.

Wall Street giants such as JPMorgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, Citi, UBS, Nomura, Royal Bank of Canada and Barclays expect the CPI to rise by 3.4%. Meanwhile, BNP Paribas, TD Bank and Wells Fargo predict that CPI inflation will fall to 3.3%.

According to economists’ forecasts, the annual CPI inflation rate will reach 3.4%, the same as last month. The monthly inflation rate is expected to fall to 0.1% from 0.3% last month. In addition, the annual core CPI is expected to fall to 3.5% from 3.6% last month, and the monthly core inflation rate is expected to remain stable at 0.3% after a sharp drop last month.

Inflation data estimates from Wall Street and economists all point to positive overall numbers, and market sentiment is rising. US stock index futures are stable today as investors prepare for the dual macro events of CPI and FOMC. Meanwhile, China announced lower-than-expected inflation.

Bitcoin traders focus on Fed rate cut in September

Banks predict that the Fed will start cutting interest rates in September. Cooling CPI inflation and PCE inflation confirm that the Fed will officially turn to rate hikes in September. Meanwhile, Fed Chairman Jerome Powell remains bullish on the state of the US economy and still expects the Fed to cut interest rates three times, although Fed swaps indicate two cuts.

The US dollar index (DXY) fell ahead of the announcement of CPI and the Fed's interest rate decision. It is currently fluctuating around 105.22 and may fall below 105 after the key macro event. CPI in line with market expectations may increase expectations of a rate cut in September, which may push Bitcoin prices higher.

In addition, the US 10-year Treasury yield (US10Y) pared its gains this week due to the positive sentiment of the market recovery and the fading of concerns caused by the release of last week's employment data. Bitcoin prices move in the opposite direction of U.S. Treasury yields and are expected to fall further as monetary policy tightening eases.

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