US CPI Inflation Estimated To Come In Hot, Crypto Market Rally To End?

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As a seasoned market analyst with over two decades of experience under my belt, I have witnessed countless market fluctuations and economic cycles. The current anticipation surrounding the upcoming US CPI inflation data is reminiscent of similar periods in the past, where market participants held their breath in eager anticipation.

It seems that market players are increasingly paying attention to the upcoming US Consumer Price Index (CPI) inflation figures, indicated by the relatively quiet trading activity observed in the wider financial industry lately. Similarly, the crypto market has experienced a downturn today, affecting Bitcoin, other cryptocurrencies, and meme coins alike. Major banks’ forecasts suggest that the inflation data will be higher than expected, which might be contributing to a less optimistic outlook among investors.

Is there much talk about whether the U.S. Federal Reserve will proceed with a policy leaning towards monetary easing?

US CPI Inflation Expected To Come In Hot

Investors seem to be holding back their moves, anticipating the upcoming US CPI inflation figures from the Labor Department this afternoon. Meanwhile, in the digital assets sector, Bitcoin and leading altcoins have seen limited activity, causing the total crypto market capitalization to decrease to about $2.89 trillion. Interestingly, this is the first time since 2021 that the crypto market has approached the $3 trillion threshold.

Many market specialists predict that the Consumer Price Index (CPI) numbers will be higher than originally thought for October. As per Investing analyst Jesse Cohen, only Goldman Sachs and Bank of America are forecasting a 2.4% inflation rate for the US in October, which remains constant from the previous month’s figure.

On the other hand, Wells Fargo aims for a rate of 2.5%, while major banks such as JP Morgan, CITI, HSBC, among others, predict a 2.6% year-over-year Consumer Price Index (CPI). This upward trend in the US CPI compared to the previous month could negatively impact investor confidence.

Lately, the Federal Reserve in the U.S. reduced interest rates by a quarter point during their November meeting of the Federal Open Market Committee (FOMC). Yet, some anticipate inflation to be higher than projected, which may influence the central bank’s monetary policy decisions. Therefore, there is curiosity about whether the Federal Reserve will continue with its easing strategy at their upcoming December assembly.

Crypto Market Rally To Halt?

Although U.S. Consumer Price Index inflation may be higher than projected, the market continues to bet on another Federal Reserve interest rate reduction in December. Based on the CME FedWatch Tool, there’s about a 62% chance of a 0.25 percentage point cut in December, with the rest predicting no alterations in the Fed’s monetary policy.

In light of recent developments, there’s been a growing worry about whether it could halt the strong surge in the cryptocurrency market, which took off following Donald Trump’s presidential victory. While some predict a temporary downturn in the market and cryptocurrency values, market analysts generally seem to maintain their positive outlook.

In simpler terms, many experts believe that although there may be some ups and downs this week, the market is ready for an increase in the near future. Adding to this optimism, experienced trader Peter Brandt has made a bullish prediction about Bitcoin, anticipating it could reach $327,000.

In the coming days, attention will be focused on the US Consumer Price Index (CPI) inflation data, as well as Producer Price Index (PPI) and comments from Fed officials. These indicators could provide important hints about future market trends. Additionally, Federal Reserve Chair Jerome Powell is scheduled to speak this week, which may influence broader market sentiments significantly. Last week, Powell stated that the Federal Reserve would proceed with caution regarding their policy rate strategies, a remark that has piqued investor interest.

Regardless of current apprehensions, it seems that digital assets are poised for a resurgence in the near future, driven by positive attitudes towards cryptocurrency within the market. Furthermore, Donald Trump’s pledges for the crypto industry have bolstered this optimism, a trend that is expected to persist and further invigorate investor confidence over the coming days.

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2024-11-13 12:54