US Inflation Eases, Will Interest Rates Soon Be Cut?

Inflation in the US has just recorded a surprising decrease, raising hopes that the Federal Reserve (Fed) will soon cut interest rates, stimulating the financial and cryptocurrency markets. However, this decision still depends on many factors, including the impact of economic policies and trade tensions under President Donald Trump. Inflation Cooling – Could the Fed Change Its Stance? According to the latest report, the core consumer price index (CPI) of the United States in March only reached 3.1%, lower than the forecasted 3.2%. This makes the market expect the Fed to loosen monetary policy to stimulate growth. Matt Mena, an expert from 21Shares, believes: 'The decrease in inflation increases the likelihood of the Fed cutting interest rates this year, helping to inject liquidity into the market and push up the prices of risky assets.' In fact, the likelihood of the Fed cutting interest rates in May has increased to 31.4%, three times higher than the previous month. Meanwhile, expectations for 3 rate cuts this year have increased fivefold to 32.5%.

How Does Bitcoin React? Despite positive inflation data, the price of Bitcoin (BTC) still decreased slightly from $84,000 to $83,000, due to concerns about President Trump's trade policies and macroeconomic instability. Many investors are concerned that Trump may be exerting pressure on the financial markets to force the Fed to cut interest rates. Analyst Anthony Pompliano believes: Trump is pushing the market into a difficult position to force the Fed to act.

In addition to the pressure of interest rate reduction, the US government also has to solve the problem of recapitalizing the huge public debt. According to The Kobeissi Letter, the US government will need to reissue approximately $9.2 trillion before 2025. If the Fed does not cut interest rates, the interest cost of the $36 trillion debt will increase sharply, putting pressure on the economy. Therefore, Trump is considering interest rate cuts as a top priority, even if it may cause short-term market volatility.