Analysis of the upcoming Producer Price Index (PPI) and Consumer Price Index (CPI) data is crucial for understanding future decisions by the US Federal Reserve and potential impacts on financial markets.
Focus on the Fed
The expected release of CPI and PPI data on September 11 and 12 will significantly influence the Fed's interest rate decision on September 17, 2025. Currently, markets are pricing in a 92% probability of a rate cut from 4.5% to 4.25%. Softer inflation readings could bolster expectations for additional cuts later this year.
Bitcoin at a Crossroads
Bitcoin's price currently sits below its all-time high of $124,500 reached in August. A softer CPI could push Bitcoin above $120,000 and potentially towards $135,000 by year-end, while hotter-than-expected data could trigger a correction below $107,200.
Inflation Week as a Market Catalyst
The report highlights that falling inflation would provide the Fed with more flexibility to ease monetary policy, increasing liquidity across all markets. Conversely, stronger-than-expected inflation figures could lead policymakers to remain cautious, restraining rallies in both traditional and digital markets.
The publication of inflation data this week will be critical for major financial markets, affecting decisions by the Federal Reserve and trader activity.
