Crypto market watchers have set their eyes on the delayed US inflation report for September, expected to be released on Friday, which is able to exceed 3% for the primary time in 2025, which could have a domino effect on crypto markets.
The US Bureau of Labor Statistics is anticipated to release September's consumer price index (CPI) on Friday. There have been delays as a consequence of the continuing government shutdown, now in its twenty fourth day.
Economists forecast inflation to rise 0.4% monthly and three.1% annually in September. So, based on Trading Economics, it could be the primary time the general CPI has exceeded 3% this yr.
CPI pressure could impact crypto
The CPI report can be the primary major data release because the U.S. government shutdown earlier this month.
Investor Ted Pillows said if the patron price index is at 3.1% or higher, the probabilities of a rate cut could decline, but whether it is at 3% or lower, “that can be good for the markets.”
Analyst “Ash Crypto” agreed, stating that a rise above 3.1% could be bearish for markets “as it should mark the best CPI reading since June 2024.”
Around 3.1% can be in step with expectations, but below 3.1% is the “perfect scenario for dangerous assets.”
“There can be rate cuts and likewise the month-on-month increase in CPI will only be 0.1% or 1.2% on an annual basis. This can even increase the likelihood of further rate cuts and lead to liquidity flowing into dangerous assets.”
“We recognize that the Fed has stated that its focus now could be on employment, but whether or not tomorrow's consumer price index data diverges significantly from expectations could still impact its considering,” Matt Maley, chief market strategist at Miller Tabak, told Bloomberg.
“So it should still have a big effect on markets if it actually doesn’t match what the consensus thinks.”
However, higher-than-expected inflation numbers are unlikely to stop the Federal Reserve from cutting rates of interest, based on Barron's.
The central bank is more focused on the weakening labor market and the probability of a rate cut next Wednesday is 98.3%, based on CME futures forecast markets.
However, the continuing government shutdown could complicate the economic picture ahead of the Fed's meeting in December, when one other rate cut is anticipated.
Inflation within the US is anticipated to rise again. Source: Trading Economics
The markets are rising barely
Cryptocurrency market capitalization has increased by 1.8% to $3.8 trillion within the last 24 hours.
Bitcoin (BTC) led the move with a transient surge above $111,000 in late trading on Thursday before falling back to the $110,500 level on the time of writing.
