The Annual CPI Inflation for July Remains at 3.2%
The U.S. Bureau of Labor Statistics reports that the annual CPI inflation for July is 3.2%, slightly lower than market expectations of 3.3%. The Core CPI inflation is also lower than expected at 4.7% compared to the estimated 4.8%. Despite this, the monthly rate remains at 0.2%. This data allows the US Federal Reserve to maintain a hawkish stance, and the stock and crypto markets will have to wait for a pivot.
Differing Predictions from Wall Street Giants
JP Morgan predicted a CPI inflation of 3.4%, while other Wall Street giants such as Goldman Sachs, Barclays, HSBC, and UBS estimated 3.2%. BMO, Bloomberg, Citigroup, Credit Suisse, Morgan Stanley, and Visa forecasted inflation to be in line at 3.3%. If headline inflation had fallen below 3%, it could have led to an upside move in the stocks and crypto markets. However, the CME FedWatchTool now shows a high probability of the Fed keeping the Federal target rate steady at the upcoming FOMC meeting in September 2023. The US Dollar Index (DXY) is expected to continue falling.
Bitcoin and Ethereum Prices Under Pressure
Traders are closely watching Bitcoin and Ethereum to see if they can surpass key psychological levels of $30k and $2000, respectively. However, both crypto prices continue to face downward pressure. BTC price has fallen by more than 1% in the past 24 hours and is currently trading near $29,500. While a small uptick is expected due to lower-than-expected inflation, analysts predict that BTC price may rise to $35k in the near future, but volatility should be expected.
Ethereum Price Trading Above $1850
Ethereum price is currently trading above $1850, experiencing a 0.5% decline in the past 24 hours. Both Bitcoin and Ethereum trading volumes have remained low for weeks due to a lack of volatility in the market.
Hot Take: Mixed Reactions in the Crypto Market
The lower-than-expected inflation data has provided room for the US Federal Reserve to maintain its hawkish stance. While some traders believe this will lead to a rise in Bitcoin and Ethereum prices, others remain cautious due to ongoing pressure and low trading volumes. The crypto market will continue to monitor the Federal Reserve’s decisions in the coming months.
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