The U.S. Bureau of Labor Statistics will announce the consumer price index (CPI) data for August today. The annual inflation rate in the U.S. is expected at 3.6%, rising for the second straight month. The headline CPI for July came in cooler-than-expected at 3.2%, but higher than the lowest of 3% for June.
Meanwhile, core inflation, which excludes volatile food and energy, is expected to ease to 4.3% from 4.7%. This CPI release is key data that will determine whether the U.S. Federal Reserve opts for further monetary policy tightening or a pause. The Fed hiked rates by another 25 bps last month to further curb inflation.
Wall Street forecasts CPI to come in line with market consensus. JPMorgan estimates a chance of CPI coming in at 3.6% influencing markets to pick slight upside momentum amid core inflation falling.
Goldman Sachs, Bloomberg, Morgan Stanley, RBC, and Wells Fargo also expect CPI to come in at 3.6%. Whereas, Visa and CIBC predict CPI at 3.5%. However, Barclays, Nomura, Citi, and HSBC are expecting CPI to rise to 3.7% for August.
Analysts believe the U.S. Federal Reserve is likely done with rate hikes as the jobs market cools and the unemployment rate climbed last month. The CME FedWatch Tool shows a 93% probability of announcing a pause at the next FOMC meeting on September 20. Wall Street analysts also believe a possible rate hike at the end of the year. Meanwhile, the US dollar index (DXY) still remains higher above 104.50, risking BTC price to continue under pressure.
US stock futures trading flat on Wednesday as investors look ahead to a key US inflation report that could influence the trajectory of Federal Reserve monetary policy.
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How Bitcoin and Altcoins Will React After CPI?
A higher-than-expected CPI report is bearish for crypto, while a lower-than-expected reading should be taken as bullish. Consider core CPI data for the month is crucial amid an increase in oil prices.
BTC price is showing volatility before the CPI data, with the price currently trading at $25,962. The 24-hour low and high are $25744 and $26451, respectively. BitMEX co-founder Arthur Hayes said the U.S. Federal Reserve deciding to cut interest rates will make Bitcoin quickly rally towards $70,000.
Meanwhile, ETH price jumped 1% in the last 24 hours. The price trades at $1591, with a 24-hour high of $1619. However, trading volume has decreased by 32% in the last 24 hours.
XRP price fell below support and currently trades at $0.47, up 1% in the last 24 hours.
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