New CPI Data Suggests Rate Cuts Still Possible in the US
New data on the Consumer Price Index (CPI) suggests that rate cuts may still be possible in the United States. Recent economic releases have indicated that inflation and economic growth are cooling down, with the latest report showing an increase in June unemployment to 4.1%. The CPI report for June is set to be released today at 8:30 am ET, following Federal Reserve Chairman Jerome Powell’s testimony on Capitol Hill this week.
Bitcoin Price Volatile Ahead of June Inflation Data
The price of Bitcoin has been experiencing volatility ahead of the release of June inflation data. Investors are eagerly awaiting the CPI report to gauge the impact on the cryptocurrency market. Powell’s recent testimony and the uncertain timing of rate cuts have added to the market’s uncertainty, with the Fed balancing risks between inflation and recession.
Market Volatility Ahead of CPI Report
Market volatility is on the rise ahead of the US CPI report expected today, as traders believe the outcome could strengthen expectations for the Federal Reserve to lower interest rates in the coming months.
Bitcoin Price Update
At the time of writing this article, Bitcoin was trading near $58,000, down nearly 2% in the last 24 hours. On July 10th, the price of BTC surpassed $59,000 as BTC whales recorded the fastest pace of accumulation since April 2023.
Expectations for the CPI Report
According to reports from CNBC, economists surveyed by Dow Jones expect the CPI to increase by 0.1% from month to month. Recent data from CryptoQuant suggests that growing demand from long-term Bitcoin holders is supporting the digital asset’s price amidst various factors triggering price declines.
Analysis of Inflation and Unemployment Trends
The Consumer Price Index (CPI) increased by 3.1% year-on-year in June. Core CPI is expected to rise by 0.2% in May and by 3.4% in June 2023.
Expert Opinion on Interest Rate Cuts
Matt Brenner, Executive Vice President of Investments and Product Manager at MissionSquare Retirement, has stated that focusing on unemployment and inflation trends could trigger interest rate cuts. He believes that the inflation rate is still high compared to the Federal Reserve’s 2% target, and while the Fed has focused on levels so far, it may shift its focus to trends. According to him, if this is the case, we may see interest rate cuts in the near future. Barron’s has reinforced this idea, writing that economists expect June inflation data to pave the way for a Federal Reserve interest rate cut in September.
