JPMorgan & Wall Street Giants See Hot US CPI Inflation at 4.2%, Bitcoin, ETH, XRP to Fall?

The US stock market and global crypto market are facing renewed selling pressure ahead of today’s US CPI inflation data release. JPMorgan, Morgan Stanley, Citigroup, and other Wall Street giants anticipate a hotter-than-expected CPI print, raising the risks of a Fed rate hike and selloffs in Bitcoin, Ethereum (ETH), and XRP.

US CPI Inflation Estimates by JPMorgan & Other Wall Street Giants

After the Nonfarm payrolls data came in significantly above expectations, investors are awaiting today’s US CPI inflation data release. An upside surprise in inflation or even in line with expectations could erase hopes of Fed rate cuts, sending Bitcoin, ETH, and XRP crashing.

Wall Street giants JPMorgan, Morgan Stanley, Deutsche Bank, Barclays, Citigroup, and Jefferies expect May CPI inflation to come in hot at 4.3%. Whereas, Bank of America, Goldman Sachs, UBS, and Wells Fargo see inflation coming at 4.2%.

The core CPI is expected to rise amid the latest US-Iran war escalation, despite President Trump signaling progress in peace talks. Notably, Wall Street giants also question a Fed rate cut this year despite sticky inflation, elevated oil prices, and strong US labor market.

CME FedWatch Tool shows a 42.9% chance of a Fed rate hike by December 2026. Also, US 2-year and 10-year Treasury yields are rising, indicating bond market traders are betting on a Fed rate hike.

Economists projected that headline US inflation rose to 4.2% in May, marking its highest level since April 2023, from 3.8% in April. Data signaled a slower rise by 0.5% on a monthly basis, following a 0.6% rise in April.

Meanwhile, core CPI inflation is expected to come in hot at 2.9% YoY, a new high from 2.8% core CPI inflation in April. Monthly inflation is seen slowing to 0.3% from 0.4% previously.

Bitcoin, ETH, and XRP Prices Could Plunge Further?

Prices of the top three crypto assets Bitcoin, ETH, and XRP are falling ahead of the May US CPI inflation release by the U.S. Bureau of Labor Statistics. This happened as the CLARITY Act passing odds fell below 50%.

Amid multiple macro and technical headwinds, Bitcoin, ETH, and XRP prices could tumble. As CoinGape reported, Wall Street experts expect the Fed to hold rates steady at Fed Chair Kevin Warsh’s first FOMC meeting.

Bitcoin is trading near $61,260 ahead of CPI inflation data release. Trading volume has increased slightly, indicating a rise in interest among some traders.

Meanwhile, analyst Ted Pillows pointed out that ETH failed to break above the Feb lows and is now coming down. He added that $1,550 is the next support zone for Ethereum, and failing to hold it means ETH will dump to new lows.

On the other hand, XRP plunged 5% to $1.11 over the past 24 hours despite on-chain data signaling a rally ahead. Trading volume tanked more than 17%.

10x Research said “Bitcoin is down $21,000 in 30 days, and it’s not MicroStrategy’s fault. When CPI hit 3.8% on May 12, we flagged inflation as a headwind the next day.”

The research firm claimed today’s US CPI inflation is key for the global markets. Bitcoin needs a print below 4% to recover. “Our model says the market is underestimating inflation,” 10x Research added.