Wall Street estimates on US CPI Inflation Data. Will Crypto Prices Recover?
Today, the U.S. Bureau of Labor Statistics will release data on the January consumer price index (CPI). The U.S. inflation rate is expected to be 6.2% in January, which is the lowest level since October last year. Inflation fell from 7.1% to 6.5% in December.
Core inflation, which excludes volatile foods and energy, is expected a decrease of 5.4% to 5.7%. This CPI data will be key data to determine whether the U.S. Federal Reserve continues tightening monetary policy. Cooling inflation caused the U.S. Fed to slow down the rate hike to 25 basis points this month.
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After a Monday jump of over 1%, the U.S. stock indices tied to futures Dow Jones and S&P 500 are currently trading flat and green.
Wall Street expects another drop in U.S. CPI data in January due to falling oil and food prices. JPMorgan predicted that CPI would fall to 6.3% with a 70% chance. According to the bank’s trading desk, a drop below 6.3% would push the market up 2.5-3%.
Barclays, Scotiabank, Bank of America and Scotiabank expect a drop in CPI to 6.1%. Credit Suisse, JPMorgan and TD Securities predict that CPI will be 6.2%, which is the same as the consensus.
Morgan Stanley, Goldman Sachs and Visa expect CPI to fall to 6.4% in January. Market sentiment is positive throughout the year so a fall in inflation will be a big boost.
The U.S. regulators’ actions against crypto firms, staking and stablecoins are causing new problems for the crypto market. The U.S. CPI data will be used by traders to determine their next move. This is in addition to the expected recovery that occurred in January.
Bitcoin’s price is currently trading at $21,849 and has risen 2% in the past 24 hours. Market sentiment is positive as investors expect a cooling inflation in the next months.
After rising steadily for the past week, the US Dollar Index (DXY), fell to 103 today. The crypto market is moving in the opposite direction of DXY. In volatile market conditions, it is important to monitor DXY’s decline.
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