Market Anticipation Builds as Investors Await U.S CPI Data

• After a huge influx of buyers into spot Bitcoin ETFs, BTC price surged beyond $50,000.
• The monetary policy outlook will be better guided by the forthcoming economic data.

Investors in cryptocurrencies and stocks are waiting with bated breath for the U.S. Bureau of Labor Statistics to release January’s consumer price index (CPI) inflation statistics, which might provide fresh clues about potential Fed rate reduction. After a huge influx of buyers into spot Bitcoin ETFs, the price of bitcoin surged beyond $50,000, setting off a significant rise in the cryptocurrency market.

Inflation in the consumer price index (CPI) and core CPI, according to Wall Street heavyweights, is expected to decline sharply after the latest adjustment to the CPI. Even if the Federal Reserve is being careful about cutting interest rates in March, the monetary policy outlook will be better guided by the forthcoming economic data.

All Eyes on Upcoming Data

Headline consumer price index (CPI) inflation is expected to decrease to 2.9% from 3.4% according to JPMorgan and several other institutions. But TD Securities, Wells Fargo, Barclays, and Goldman Sachs all predict a drop to 3%.

However, analysts from major financial institutions such as UBS, Citigroup, Deutsche Bank, JPMorgan, and Morgan Stanley predict a decline to 3.7% from 3.9% for core CPI. More specifically, Nomura, Bank of America, Barclays, and TD Securities all predict a 3.8% annual core rate, while Goldman Sachs predicts a higher 3.9% rate.

This led investors to predict that January’s annual inflation rate would be 2.9%, the lowest number since March 2021. Thus, investors anticipate a slowdown in annual core inflation to 3.7%, which would be the lowest level since April 2021. The consumer price index (CPI) and core CPI are expected to maintain their respective monthly rates of 0.2% and 0.3%.

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