US Inflation Report Anticipation

The US market is eagerly waiting for the second inflation report of 2025, scheduled for release today. Analysts predict a slight drop in both headline and core inflation. If confirmed, this would mark the first decline in both indicators since July 2024.

US Inflation Expectations for February

In January 2025, the core inflation rate rose from 3.2% to 3.3%. The consensus expects it to decrease from 3.3% to 3.2% in February. TEForecast predicts a sharper drop to 3.1%.

In January 2025, the US inflation rate increased from 2.9% to 3%. The consensus is that this rate will decline from 3% to 2.9% in February.

If confirmed, this would be the first time since July 2024 that both inflation indicators have fallen. In July 2024, the core inflation rate dropped from 3.3% to 3.2%, while the US inflation rate fell from 3% to 2.9%.

Since September 2024, the US inflation rate has consistently risen, with core inflation increasing from 3.2% to 3.3% in September. It remained stable for two months before decreasing to 3.2% in December.

Market Confidence in Inflation Cooling

Markets are optimistic about decreasing inflation. Kalshi traders predict a headline CPI drop to 2.9%, having accurately forecasted 6 of the last 8 CPI numbers.

Impact of Trump’s Trade Policies on Inflation

US President Donald Trump recently imposed import tariffs on China, Canada, and Mexico. His aggressive trade policies have triggered retaliatory tariffs and pushed the global economy towards a potential trade war.

Today’s inflation report will reflect the impact of Trump’s tough trade policies.

Impact on the Cryptocurrency Market

If inflation declines as expected, it may influence the cryptocurrency market. A cooling inflation rate increases the likelihood of the Federal Reserve easing monetary policy, which could lower interest rates and favor risk assets like cryptocurrencies, boosting investor confidence. However, uncertainties surrounding Trump’s trade policies may introduce volatility, as global economic instability often drives investors to safe-haven assets like gold. Conversely, if inflation remains high, the Fed may maintain tight monetary policies, exerting pressure on broader financial and crypto markets.