In August, the annualized overall inflation rate dropped from 2.9% in July to 2.5%, marking the lowest level since March 2021, when it stood at 2.6%. This signals that the Federal Reserve is nearing its 2% inflation target.
The continued decline in inflation could pave the way for future interest rate cuts, which would support stable economic growth and fuel the long-term upward trajectory of Bitcoin and Ethereum.
While the core Personal Consumption Expenditures (PCE) data, set to be released later this month, is the Federal Reserve’s preferred inflation gauge, the Consumer Price Index (CPI) remains a key driver of stock market sentiment. This could push the prices of risk assets denominated in U.S. dollars higher.