📉 With inflation data low and expectations of a Fed rate cut rising, how will Bitcoin prices react?
📈 The latest CPI report reveals slowing inflation! The CPI inflation report released on Wednesday showed that the consumer price index achieved the lowest increase since March 2021. The market reacted quickly to this, and Bitcoin prices fell shortly after the report was released.
🤔 Buy the rumor, sell the news? Bitcoin spot prices rose sharply on Tuesday and continued to rise on Wednesday morning, but with the release of the CPI report, BTC prices fell back to $58,000 that day. Economists had previously expected inflation data to fall, which is consistent with the results of a Dow Jones survey of economic analysts.
🎯 Does the CPI report affect the Fed's decision? Jim Baird, chief investment officer of Plante Moran Financial Advisors, pointed out that inflation pressures have been greatly reduced at present, and the market generally expects that the worst is over. Baird believes that given the weakness in the labor market and the rapid decline in inflation, it will be a surprising decision if the Fed does not start to ease policy at the September meeting. This could be a sign of a major setback for financial markets!
💰 The view is that the decline in inflation indicators provides sufficient reason for the Federal Reserve to cut interest rates later this year, which is expected to be as early as September. History shows that when the Federal Reserve lowers interest rates or hints at lower interest rates, Bitcoin prices tend to rise. This is due to supply and demand and the fixed supply characteristics of Bitcoin!
🚀 Bitcoin's supply cap is fixed at 21 million, and the issuance volume is halved every four years, which naturally forms the phenomenon that Bitcoin prices are inversely proportional to US dollar interest rates. At the same time, the fluctuations in BTC prices before and after the release of the latest inflation data are a reflection of this law.
💬 Do you think the Fed's interest rate cut will have an impact on Bitcoin prices? Feel free to share your views in the comments section!
