US CPI Announcement Today: Could the Fed’s Move Fuel a Crypto Rally?

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The US Core Consumer Price Index is set to be released today. This release is extremely significant, as it will determine whether the US Federal Reserve will move forward with its rate cut plan or not. Cryptocurrency enthusiasts are eagerly anticipating a rate cut, as it could lead to a bullish trend in the crypto sector. So, all eyes are on this crucial economic indicator. 

US Inflation Expectations for August

Most top institutions have predicted that August’s CPI inflation will be around 2.5% to 2.6%. As per a post published on X by The Kobeissi Letter, among the institutions expecting the headline inflation to be 2.5%, we have Kalshi, TD Securities, UBS, Citigroup, Barclays, and JP Morgan. Among those expecting 2.6%, we have Goldman Sachs, Wells Fargo, Deutsche Bank, and Morgan Stanley. Interestingly, Bank of America is also aligned with the 2.6% expectation. 

In August 2019, the US Core Inflation Rate was around 2.4%. In January 2020, it dropped to a low of 1.2%. Between February 2021 and March 2022, the rate saw a strong upward trend. During the period, the rate increased from 1.3% to around 6.5%. By September 2022, it had peaked at 6.6%. Since then, it has been gradually moving downwards. At the beginning of this year, it was 3.9%. In July, it dropped to 3.2%. As per Trading Economics’ forecast, the rate is expected to remain around 3.2% in August.

Likewise, in August 2019, the US Inflation Rate was 1.7%. It hit a low of 0.1% in May 2020. Between May 2020 and June 2022, the rate rose sharply, reaching a peak of 9.1% in June 2022. Since then, it has been on a slow decline. At the start of this year, the inflation rate was 3.1%. By June, it had further declined to 2.9%. Trading Economics predicts that it may dip even lower this month, to a level of 2.7%. A majority of institutions believe that it could drop to 2.6%, or even 2.5%, as mentioned in the post published by The Kobeissi Letter. 

Potential US Market Impact 

The question remains whether the US Federal Reserve will move forward with its rate cut plan. According to insights from a post on X by Wise Advice, if the CPI comes in below the level of 2.6%, there is a high likelihood that the authority will implement a rate cut. If it is above the said level, the chances of a rate cut decrease. 

In conclusion, if the US Federal Reserve announces a rate cut, it could signal a new beginning for the crypto industry. All conditions are favorable for growth in the cryptocurrency sector. Only one more thing is needed – a catalyst. The rate cut could be the impetus the industry urgently requires right now. 

Also Read: Bitcoin Price Prediction 2025: Could $1 Million Be in Sight?