Inflation in the U.S. cooled more than expected in February, but the crypto market remained largely unresponsive to this positive economic signal.
Inflation Drop and Cryptocurrencies
The Consumer Price Index (CPI) report showed a decrease in inflation to 2.8% over the past 12 months, beating the forecast of 2.9%. Despite this, cryptocurrency prices were largely unresponsive. For example, Bitcoin was trading at $82,770.45, roughly flat over the past 24 hours, with the total market valuation down 0.25%.
Potential Impact of Tariffs on Inflation
Dr. Youwei Yang, Chief Economist at BIT Mining, believes the muted market response reflects deeper fears about policy risks, particularly from President Trump's new tariffs on steel and aluminum. These measures could complicate inflation control and destabilize markets. Yang highlighted that high inflation from tariffs makes rate cuts harder, but market declines and job losses put pressure on the Federal Reserve to lower rates sooner.
Need for Clear Signals for the Crypto Market
Yang also pointed out that cryptocurrency markets are holding back due to uncertainty over future policy direction. Investors are looking for clearer support from the White House or the Fed, especially after the recent crypto summit failed to provide clarity on regulation. Until clearer signals emerge, fear and uncertainty will continue to affect crypto market sentiment.
While U.S. inflation shows positive cooling signs, the crypto market awaits clearer political and economic signals to regain confidence and re-engage in growth.
