The financial markets, including the crypto world, are dominated by the American inflation report this week. The latest consumer price index (CPI) will be published on Wednesday, and investors hope for signals that inflation will cool down further.
Why this CPI report is so important
The inflation expectations indicate an increase of 0.3% in February, after an increase of 0.5% in January. On an annual basis, inflation could fall below 3% for the first time since the beginning of 2023, with an expected decrease to 2.9%.
Nevertheless, inflation remains above the 2%objective of the Federal Reserve (FED), which means that the interest may remain high for longer. In particular, wage growth and the costs for services play a major role in this, while demand in certain sectors is actually decreasing.
Extra uncertainty comes from Donald Trumps proposed trading rates on products from Canada, Mexico and China. If this further increases the prices, the FED can be forced to hold on to a tighter monetary policy for longer.
What this means for the cryptomarket
The cryptomarkt responds strongly to inflation figures. A lower than expected CPI can give hope for interest rate letings by the FED, which would turn out positive for Bitcoin (BTC) and Altcoins. Higher inflation, on the other hand, would increase the chance of a longer restrictive policy, which can put pressure on risk investments.
According to Financial Podcaster Brian Rose, a favorable inflation report can be the following impulse for the cryptomarket. “This could be a strong catalyst for the bullmarkt,” says Rose. “Small projects and crypto can start to rise if the inflation figures are better than expected.”
The Crypto Fear and Greed Index is currently at 34, which is a slight improvement compared to the previous day, when it was still 20 (extreme fear). The total market cap of Crypto has risen by 1% in the last 24 hours, but the trade volumes have fallen by 27%. This points to a cautious attitude among investors.
In addition to the CPI report, Markts will also receive the producer Price Index (PPI) and the weekly unemployment requests on Thursday. These figures provide further insights into inflation and the labor market and can influence the expectations for the FED.
In the coming days, the financial markets can be decisive. If the inflation figures are favorable, this can fuel the long -awaited bullish momentum for crypto. But with imminent trading rates and other economic uncertainties, the risk of disappointment remains.
Claim € 10 free today and do not pay trading costs over the first € 10,000!
Grab this unique opportunity with Newsbit and Bitvavo by creating an account now via the button below. Only deposit € 10 and receive € 10 free of charge. Moreover, you can act without costs for 7 days over your first € 10,000 in transactions. Start today and take advantage of the growing popularity of Crypto!
Make your account and claim € 10 for free.
Don’t miss this opportunity to take advantage of the growing popularity of Crypto!
Source: https://newsbit.nl/cpi-rapport-vandaag-dit-betekent-het-voor-crypto/
