- This Consumer Price Index (CPI) release is one of the significant data points that will determine whether the U.S. Federal Reserve will prefer to tighten monetary policy further or take a pause.
- Goldman Sachs, Bloomberg, Morgan Stanley, RBC, and Wells Fargo also expect the CPI to come in at 3.6%. Visa and CIBC, on the other hand, predict a CPI of 3.5%.
- The BTC price is showing fluctuations ahead of the CPI data, currently trading at $25,990. The 24-hour low and high are set at $25,744 and $26,451, respectively.
Critical inflation reports in the U.S. are set to be released today! What are the expectations for inflation, and will Bitcoin’s price be affected?
U.S. Inflation Data to Be Released Today
The U.S. Bureau of Labor Statistics will release the Consumer Price Index (CPI) data for August today. The annual inflation rate in the U.S. is expected to be 3.6%, marking the second consecutive month of increase. July’s inflation came in lower than expected at 3.2%, but it is still above the June low of 3%.
Meanwhile, core inflation, which excludes volatile food and energy, is expected to decrease from 4.7% to 4.3%. This CPI release is one of the significant data points that will determine whether the U.S. Federal Reserve will prefer to tighten monetary policy further or take a pause. The Fed raised interest rates by another 25 basis points last month to rein in inflation.
Wall Street expects the CPI to align with market sentiment. JPMorgan predicts a 3.6% CPI and expects it to have a mild upward effect on markets as core inflation decreases.
Goldman Sachs, Bloomberg, Morgan Stanley, RBC, and Wells Fargo also expect the CPI to come in at 3.6%. Visa and CIBC, on the other hand, predict a CPI of 3.5%. However, Barclays, Nomura, Citi, and HSBC anticipate a higher CPI of 3.7% for August.
According to analysts, the U.S. Federal Reserve has likely completed its interest rate hikes as the job market cools, and the unemployment rate increased last month. CME FedWatch shows a 93% probability of announcing a pause at the next FOMC meeting on September 20. Wall Street analysts also expect a possible interest rate hike by year-end. Meanwhile, the U.S. Dollar Index (DXY) remains high above 104.50, posing a risk of continued pressure on the BTC price.
How Will Cryptocurrencies React After the CPI?
A CPI report higher than expected should be considered negative for cryptocurrencies, while a reading lower than expected should be seen as positive. Despite the increase in oil prices earlier in the month, core CPI data should be closely considered.
The BTC price is showing fluctuations ahead of the CPI data, currently trading at $25,990. The 24-hour low and high are set at $25,744 and $26,451, respectively. BitMEX co-founder Arthur Hayes stated that if the U.S. Federal Reserve decides to cut interest rates, it would quickly propel Bitcoin to $70,000.
In the meantime, the ETH price has risen by 1% in the last 24 hours. The price is trading at $1,595, with a high of $1,619 in the past 24 hours. However, trading volume has decreased by 32% in the last 24 hours. The XRP price has fallen below the support level and is currently trading at $0.479, showing a 1% increase in the last 24 hours.
