The upcoming U.S. Consumer Price Index (CPI) report is anticipated to reveal a year-over-year inflation decrease from 3% to 2.9%, with core inflation expected to decline to 3.2%. This report marks the first since President Trump's administration began. If the inflation rate cools, it could increase the likelihood of interest rate cuts, thereby enhancing the attractiveness of riskier assets like cryptocurrencies. Recently, the S&P 500 has experienced a nearly 10% drop, while Bitcoin has seen a decline of about 30%. Adjustments to the 10-year Treasury yields, which have fallen to 4.2%, indicate that the administration's strategy might be producing positive results. Despite improvements, long-term inflation expectations remain above 2%, indicating challenges ahead. Investors are keenly observing the inflation report, as a cooler-than-expected outcome may prompt the Federal Reserve to consider rate cuts, whereas a hotter report could sustain higher rates, further pressuring risk assets.

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