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The crypto market remains stable, as new data shows that US inflation has dropped by 2.3%.
This week, the crypto market strengthened due to new inflation data suggesting a slowing U.S. economy. The U.S. Bureau of Labor Statistics reported that April’s Consumer Price Index (CPI) was up 2.3% compared to last year, which is lower than the expected 2.4%. Monthly inflation increased by only 0.2%. These numbers have led to renewed talk about possible interest rate cuts from the Federal Reserve.
In April, the Producer Price Index (PPI) increased by 2.4% compared to last year, which was lower than expected. This rise was mainly due to a 0.7% drop in final demand services, indicating that wholesale prices are easing. The Consumer Price Index (CPI) and PPI reports show a general decrease in inflation across the economy.
Bitcoin gained a modest 1%, briefly reaching $103,000 before dropping slightly below that level. Ethereum stayed strong around $2,548. The total value of the cryptocurrency market remained above $3.3 trillion, backed by steady investor confidence and a strong job market.
Rate Cut Odds And Market Outlook
The Federal Reserve has not changed its interest rate policy yet, but lower inflation is pushing it to rethink its strict approach. Some analysts believe there is a 35% chance of a rate cut in July, and a 66% chance by September, which is lower than earlier predictions.
Fed Chair Jerome Powell recently said that ongoing tariff talks and global issues could impact future decisions. Still, if inflation continues to retreat and trade pressures stabilize, conditions could align for a rate reduction sooner than expected.
