Key Points
- CPI new data may suggest rate cuts are still in play in the US.
- Bitcoin’s price sees volatility ahead of June’s inflation report.
The consumer price index report for June is scheduled to be released today at 8:30 am ET.
According to the latest reports from CNBC, the recent economic releases have suggested that inflation and economic growth are cooling down. The data includes last week’s report that June unemployment ticked up to 4.1%.
Today’s report comes after the Federal Reserve Chair Jerome Powell delivered two days of testimony on Capitol Hill this week. CNBC notes that the central bank chief did not say exactly when rate cuts will begin.
However, he did point out that the Fed sees risks to the economy as more in balance between inflation and recession. He also said there’s no need to wait until inflation hits the 2% level in order to cut rates.
Market Volatility Ahead of CPI Report
The widely anticipated US CPI report that is expected today is triggering market volatility, as traders believe that the outcome could solidify expectations for the Federal Reserve to cut interest rates in the coming months.
At the moment of writing this article, Bitcoin is trading close to $58,000, down by almost 2% in the past 24 hours.
On July 10, BTC’s price surged above $59,000, as BTC whales recorded the fastest accumulation rate since April 2023.
CryptoQuant recently highlighted that this reveals that the increasing demand for Bitcoin’s long-term holders supports the price of the digital asset amidst multiple factors that triggered price dips.
CPI Expectations
According to the same reports from CNBC, economists surveyed by Dow Jones are looking for CPI to rise 0.1% MoM (month over month) and 3.1% YoY (year over year).
The core CPI is expected to rise 0.2% from May and 3.4% since June 2023.
Matt Brenner, managing vice president, investments, and product manager at MissionSquare Retirement, stated that focusing on the trends of unemployment and inflation could trigger rate cuts.
He believes that the level of inflation is still elevated relative to the Fed’s 2% target, and while the Fed has been focused on levels so far, they could shift the focus on the trend. According to him, if this is the case, we might see rate cuts in the near future.
Barron’s also reinforced the idea, writing that economists expect June inflation data to leave the door open for a Federal Reserve rate cut in September.
