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How Will Today's Inflation Data Release Affect Bitcoin and FED?
Today, the inflation data, which is important to the Fed when making interest rate decisions, will be announced. The Fed kept interest rates unchanged in January and paused rate cuts in September, November, and December. In this situation, while the expectation of prolonged interest rate cuts until June, the CPI data to be released today is of particular importance. At this time, while the January CPI data in the United States is expected to show limited inflation growth, lower-than-expected CPI data is expected to be a positive signal for risk assets, including Bitcoin (BTC). This is due to lower-than-expected data, especially core inflation, which will support expectations of further interest rate cuts, potentially leading to lower bond yields and a weaker dollar index. It could also increase demand for riskier assets such as Bitcoin. However, analysts believe that investors expecting a major price increase will be disappointed, and even if there is an increase, it will be limited. Analysts say the potential for changes in interest rate cuts could push BTC prices higher, but it won't be enough to escape the consolidation trend between $90,000 and $110,000. What are the expectations of CPI? Analysts at BlackRock and RBC Capital said they do not expect CPI data to prompt the Fed to cut interest rates. According to Coindesk, RBC analysts predict that concerns about the trade war initiated by Donald Trump's tariff actions will increase inflation and make the FED more cautious in cutting interest rates. We do not expect progress in inflation to be sufficient to prompt the Fed to cut interest rates further this year. We expect the January report to show mild downward price pressures. BlackRock analysts also said that even if CPI is lower than expected, the Fed is unlikely to cut rates. BlackRock analysts said that persistent inflation, especially in the services sector, will prevent the Fed from cutting interest rates. "US CPI data for January will be released today. Even though the December CPI report showed signs of easing inflation pressure, our view is that wage growth remains higher than the inflation threshold for the Fed to return to its 2% target. We see persistent service inflation forcing the Fed to keep interest rates high for longer." What does Jerome Powell think? Federal Reserve Chairman Jerome Powell said in yesterday's Senate Banking Committee hearing that the unemployment rate and low inflation are still above the Fed's 2% target. Powell stated that the Fed is not in a hurry to further cut interest rates as the overall economy remains strong. DYOR! #Write2Earn #Write&Earn $BTC {spot}(BTCUSDT)