📈 The latest CPI data is out. How do the market's expectations for rate cuts and Bitcoin prices react?
In line with most expectations, the U.S. Consumer Price Index (CPI) rose 2.5% year-on-year in August, 0.4% lower than in July.
Experts say this almost resolves the debate over whether the Fed will cut its benchmark interest rate by 25 basis points or 50 basis points.
The 2.5% increase in the CPI in August indicates a slight decline in the indicator over the past year. In fact, the year-on-year increase in August 2023 was 3.7%. The highest point in 2024 was in March, at 3.5%.
And in August 2024, the core CPI, which excludes more volatile industries such as food and energy, rose 3.2%, the same as the July data.
This CPI report is of great significance to investors because it is the last report before the FOMC meeting on September 18-19.
Recall that Fed Chairman Powell said at the end of August that it was time for the central bank to start lowering interest rates, indicating that a rate cut in September may be a done deal.
Most experts currently believe that the optimistic data on inflation rates means that the Fed will cut interest rates by 25 basis points next week.
If this is the case, then this development may have already been factored into the price, especially for riskier assets such as Bitcoin.
Before the release of the CPI data, the price of the major cryptocurrency was relatively stable. After the release, its price fell to a low of around $56,000, and the current price is hovering around $5,8000.
💭 What do you think about the impact of this CPI report on the price of Bitcoin? Do you think the Fed will cut interest rates by 25 basis points or more in September? And whether this will affect the trend of the cryptocurrency market? Share your views in the comments section!
