Global financial markets are focused on the US Consumer Price Index (CPI) data to be released today, with the July CPI figures being one of the most important macroeconomic data points of the week in terms of Bitcoin and overall risk appetite.
For Bitcoin, the critical point is not just whether the data comes in higher or lower than expected, but how it will change expectations regarding the Fed’s interest rate policy.
If core inflation comes in below expectations, markets may price in a more dovish Fed policy. In this scenario, pressure on bond yields and the dollar could lead to buying in risky assets like Bitcoin. Conversely, higher-than-expected inflation data could cause the Fed to be more cautious about interest rate cuts, potentially leading to a rise in the dollar and US bond yields while creating short-term selling pressure on Bitcoin.
At this point, while there is talk that the Fed may even raise interest rates in the coming months (according to FEDWatcholl data, the probability of a rate hike in September is priced at 48.1%), the US July inflation data, which the Fed closely monitors when making its interest rate decisions, has been released.
Here are the US inflation figures that have been released:
Consumer Price Index Annual: Announced 3.4% – Expected 3.4% – Previous 3.5%
Consumer Price Index Monthly: Announced 0.1% – Expectation 0.1% – Previous -0.4%
Core Consumer Price Index Annual: Announced 2.5% – Expected 2.5% – Previous 2.6%
Core Consumer Price Index Monthly: Announced 0.2% – Expected 0.2% – Previous 0.0%
The consumer price index is a key variable used to measure consumer purchasing trends and changes in US inflation.
Bitcoin’s Initial Reaction After the CPI Data!
*This is not investment advice.
