Wall Street estimates surrounding the US CPI inflation and the US Federal Reserve’s interest rate decision suggest a bullish outlook for both crypto and stock markets. This could lead to a rebound for top cryptocurrencies like Bitcoin and Ethereum, following the recent crypto market crash.
The US Bureau of Labor Statistics reported that annual CPI inflation cooled to 4.1% in May, down from 4.9% in April and 5% in March. This marks the lowest rate since March 2021. At the same time, core inflation cooled to 5.3%, down from 5.5%. Wall Street giants like JP Morgan, Goldman Sachs, and RBC estimated CPI rates at 4.2%, while HSBC, BMO, and UBS projected the rate at 4.1%. Other financial institutions, such as Barclays, Bloomberg, CIBC, Citigroup, Credit Suisse, Morgan Stanley, Visa, and Wells Fargo, predict CPI inflation to drop further, to 4%.
Many analysts believe that inflation in the US is set for historic declines over the next two months as investors brace for a big week. Notably, the US Federal Reserve is expected to make a monetary policy decision, alongside interest rate decisions by the European Central Bank and Bank of Japan. The Dow Jones, S&P 500, and Nasdaq futures are now rising, with large money managers and investors slashing bearish bets and buying stocks in anticipation of cooling inflation and the US Fed’s potential decision to “skip” a rate hike on June 14th. The CME FedWatch Tool shows an 80% probability of the Federal Reserve keeping its policy rate unchanged.
In the meantime, US Treasury yields and the US dollar continue to dip ahead of the key CPI data and the Federal Reserve’s monetary policy decision, further supporting a bullish sentiment for cryptocurrency. The US Dollar Index (DXY) fell 0.34% to 103.21 on Tuesday.
It appears that Bitcoin and Ethereum prices could rise following the release of CPI data. Bitcoin price saw an increase of 1% in the last 24 hours, with Ethereum price currently trading above $1,750. Other altcoins, such as XRP, Litecoin, and Shiba Inu, have also shown some upward momentum. Terra Classic (LUNC) is leading the rally as a result of the parity upgrade, with a notable 11% jump in the past 24 hours.
Investment in cryptocurrencies should always be supported by thorough market research, as the content presented may reflect the personal opinion of the author and is subject to market conditions. Neither the author nor the publication takes responsibility for any personal financial loss.
Source: Coingape
