US CPI Inflation Eases To 3.1%, Room For Federal Reserve To Pause Rates

The U.S. Bureau of Labor Statistics announced the consumer price index (CPI) inflation data for November today. The CPI inflation eased to 3.1%, the lowest in the last five months. The crypto market will recover from the recent selloff but traders are likely to await the Fed rate decision. The annual inflation rate came in at 3.2% for October, slowing from 3.7%.

Market Recovery In Sight As CPI Inflation Cools

Wall Street estimated US CPI inflation cooling again, but core CPI inflation is expected to show some stickiness, with the annual core rate seen steady at 4% and the monthly rate seen rising to 0.3% from 0.2%.

Goldman Sachs, Nomura, Citadel, Barclays, Bank of America, RBC, and Citi expected CPI to come in line with consensus at 3.1%. Whereas, JPMorgan, Morgan Stanley, Visa, BMO, and Wells Fargo predicted CPI at 3%. However, UBS and CIBS are expecting CPI to remain stagnant at 3.2% for November.

The cooling CPI inflation will give the U.S. Federal Reserve room to consider lower interest rates in the months ahead. The CME FedWatch Tool shows a 98.4% probability of announcing a pause at the next FOMC meeting on Wednesday.

Meanwhile, the US dollar index (DXY) also fell under 104. It is now moving near 103.75, which could bring a rebound in BTC price.

“Short-term inflation expectations have come down sharply on lower energy prices in recent months. That makes more room for the Fed to consider rate cuts as downside risks for activity and upside inflation risks become more balanced, said Bloomberg economists Anna Wong and Stuart Paul.

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Bitcoin and Other Crypto Price Action After CPI

CoinGape warned about a potential upcoming crypto market correction to $40k this week citing factors including Bitcoin CME Gap.

Analysts expect a continuation in BTC price upwards as a pullback was necessary for confirming further rally to $50k and potentially to $60k. Bitcoin open interests (OI) on CME and Binance are rising again, hinting at potential recovery. However, traders are expected to wait until Fed rate decision for further guidance.

BTC price is currently trading at $41,771, down more than 1% in the last 24 hours as traders await CPI data. The 24-hour low and high are $40,234 and $42,470, respectively. Furthermore, the trading volumes has increased by 20% in the past 24 hours, indicating interest among traders.

Also Read: Cathie Wood’s Ark Invest Sells $2M Coinbase & $13M GBTC Shares, Buys Meta