US CPI In Focus After Jobs Data Dampens 50 BPS Fed Rate Cut Hopes

The crypto market is waiting for the US Consumer Price Index (CPI) data, which is scheduled to be released later this week. The data, crucial to understanding the inflationary pressure in the economy, would be closely watched by investors, especially after the gloomy US Job data weighed on market sentiment. The stronger-than-anticipated nonfarm payroll data has dampened hopes over a potential 50 bps rate cut by the US Fed at their upcoming meeting.

Crypto Market Awaits US CPI Data

The US CPI data, which is scheduled to be released on Thursday, October 10, will be closely watched by the traders. Besides, these data are also evaluated by the US central bank to understand the inflation level in the nation. In other words, it is a crucial metric that helps the US Fed to decide its monetary policy plans.

According to market estimates, the CPI figures are expected to cool down to 0.1% in September, down from 0.2% in the prior month. On a YoY basis, the inflation is anticipated to come in at 2.3%, a decline from 2.5% noted in August.

On the other hand, the Core CPI, which excludes energy and food prices, is expected to show a cooling inflation of 0.2%, down from 0.3% in the previous month. However, the Core CPI, on an annual basis, is estimated to remain unchanged at 3.2%.

Meanwhile, the cooling inflation figures could boost the market sentiment, potentially triggering a rally in the crypto market. However, if the data shows a hotter-than-expected inflation level, the selling pressure in the market could worsen further.

US PPI And Fed Officials Speeches In Focus

The latest US Job data has weighed on the market sentiment, as it indicated a strong labor market. Usually, the decreasing nonfarm payroll data and soaring unemployment rate boost the market sentiment, raising bets over a larger US Fed rate cut. However, the latest data showed otherwise, with many experts like the BlackRock CIO now anticipating a 25 bps rate cut at the central bank’s upcoming meeting.

Meanwhile, amid this, the US CPI data will play a crucial role in shaping the market sentiment. In addition, another essential inflation metric, US PPI data, is also scheduled for next week. This would further shed light on the inflation level in the US, influencing the policy rate decision of the US Federal Reserve.

In addition, a flurry of Fed officials are expected to speak next week. The officials’ comments will also be closely watched by the investors, for cues on the central bank’s next move with their monetary policy plans.

Previously, Fed Chair Jerome Powell showed confidence towards a cooling inflation level in the US. Simultaneously, other Fed officials also leaned towards a larger rate cut of 50 BPS points at the central bank’s upcoming meeting this year.