Markets already price in no further rate hikes from the Fed this year and have begun pricing in rate cuts in 2024.
The U.S. Bureau of Labor Statistics will release its July Consumer Price Index (CPI) report, and Bitcoin BTC 0.38% bulls are hoping for continued good news on U.S. inflation.
Economists expected a 0.2% month-on-month increase, the same as in June. Year-over-year growth is forecast at 3.3%, up from the 3% forecast in June.
Unadjusted headline inflation, which includes often volatile food and energy prices, peaked at 9.1% in June 2022 and 8.5% in July last year.
Core CPI, which strips out volatile food and energy costs, is expected to come in at 0.2% in July, unchanged from June. Annual core CPI growth is expected to slow to 4.7% from 4.8%.
The core CPI peaked at 6.5% in March 2022, compared with an annual level of 5.9% in July a year ago.
While the Federal Reserve’s tightening policy has partly contributed to Bitcoin’s price crash, a slowdown, and possibly even an end, of the tightening policy has also been seen as a factor in Bitcoin’s modest recovery.
Short-term interest rate traders have already priced in no rate hikes from the Fed this year, although low CPI data on Thursday may reinforce that view.
Forecasts for next year from CME Group showed traders expect the Fed to cut rates as early as February.
