đ¨đ¨US CPI Decline Sparks Market Volatility as Core Inflation Reboundsđ¨đ¨
The latest CPI data reveals mixed signals for the U.S. economy, with Septemberâs overall inflation rate at 2.4%, higher than the expected 2.3% but marking six consecutive declines and hitting a low not seen since February 2021. However, core inflation rose to 3.3%, surpassing both the expected and previous 3.2%, adding to market uncertainty.
đ¨Rising Jobless Claims and Interest Rate Cut Expectationsâźď¸
The number of initial jobless claims reached 258,000, the highest since August 2023 and above the expected 230,000. Traders now anticipate a 25-point interest rate cut in November, with the Federal Reserve expected to ease monetary policy into 2025. Analysts believe labor data will remain crucial for future rate decisions.
đ¨Fedâs Balancing Act Amid Inflation and Election Pressureâźď¸
With this CPI report being the final one before the November 5 election, the Federal Reserve faces heightened scrutiny. Economic sentiment will play a pivotal role in the political landscape, pressuring the Fed to align its policies to stabilize markets while managing public expectations on inflation.
Crypto and Stock Markets at a Crossroad
Despite uncertainty, U.S. stock markets have shown resilience, and the crypto market could follow suit. Bitcoinâs recent bearish movement has sparked debate, but analysts remain optimistic about a medium-term rebound, with some predicting Bitcoin could surpass $80,000 by year-end if macroeconomic conditions align.
Institutional Sentiment and Future Prospects
Despite geopolitical tensions and market volatility, institutions remain bullish. FTXâs plan to release $14.7 billion to $16.5 billion in cash and the potential of further Fed rate cuts are seen as positive signals. With Bitcoin-friendly Trump polling stronger than Harris, optimism around cryptoâs outlook persists as investors await key market events.
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