Consumer Price Index (CPI) Data for August to Determine US Inflation Rate
The US Bureau of Labor Statistics will release the consumer price index (CPI) data for August today. Experts predict that the annual inflation rate in the US will reach 3.6%, marking a second consecutive monthly increase. In July, the headline CPI was slightly lower than expected at 3.2%, but still higher than the June figure of 3%. The upcoming CPI release will play a critical role in determining whether the US Federal Reserve will continue to tighten monetary policy or put it on hold. Last month, the Fed raised interest rates by 25 basis points as part of efforts to control inflation.
Wall Street Forecasts and Analyst Predictions
Wall Street analysts are forecasting that the CPI data will align with market consensus. JPMorgan predicts a 3.6% CPI rate, which could lead to slight upward momentum in the markets due to a decrease in core inflation. Goldman Sachs, Bloomberg, Morgan Stanley, RBC, and Wells Fargo also expect the CPI to be at 3.6%, while Visa and CIBC anticipate a rate of 3.5%. On the other hand, Barclays, Nomura, Citi, and HSBC predict a rise in CPI to 3.7% for August. Analysts believe that the Fed is likely to halt rate hikes as the job market cools and the unemployment rate rises, with a possible rate hike at the end of the year.
Bitcoin and Altcoin Reactions to CPI Data
The CPI report will have implications for the cryptocurrency market. If the CPI is higher than expected, it could have a bearish effect on crypto, while a lower-than-expected reading could be seen as bullish. The core CPI data will be particularly important, given the increase in oil prices. Currently, Bitcoin’s price is experiencing volatility ahead of the CPI data, with the price trading at $25,962. Ethereum’s price has risen 1% in the last 24 hours and is trading at $1591, but trading volume has decreased by 32%. XRP’s price has fallen below support and currently trades at $0.47, up 1% in the last 24 hours.
Hot Take: US Inflation Report Influences Federal Reserve Policy
The upcoming US inflation report has the potential to shape the future direction of Federal Reserve monetary policy. The data will determine whether the Fed opts for further tightening or decides to pause. Market consensus suggests that the CPI will be around 3.6%, although some analysts predict slightly higher or lower rates. The Fed has already raised interest rates in an effort to combat inflation, but with signs of a cooling job market, analysts believe that the central bank may pause in its rate hikes. The outcome of the CPI data will be closely watched by investors and could impact the US dollar and cryptocurrency prices.
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