TechFlow news, September 12 — According to CoinDesk, the U.S. Bureau of Labor Statistics released August's Consumer Price Index (CPI) data on September 12, 2024, showing continued easing of inflationary pressures, which could benefit the cryptocurrency market. The annualized headline inflation rate dropped to 2.5% in August, down from 2.9% in July, marking the lowest level since March 2021. This indicates that the Federal Reserve is drawing closer to its 2% inflation target.
Financial analyst Scott Garliss noted in an opinion article that this CPI report is the final major economic growth indicator ahead of the Fed's monetary policy meeting on September 17–18. Combined with the previously released weak Beige Book survey and disappointing job growth figures, a sufficiently soft inflation reading could push the Fed toward a more dovish (rate-cutting) stance.
Garliss pointed out that while the core Personal Consumption Expenditures (PCE) index remains the Fed’s preferred inflation measure, CPI still significantly influences stock market sentiment. August’s CPI figure met Wall Street’s expectation of 2.5%, further reinforcing expectations of an upcoming rate cut—potentially by as much as 50 basis points. He predicts that Fed rate cuts will lead to a weaker U.S. dollar, thereby boosting prices of dollar-denominated risk assets. This trend would support sustained long-term gains in the cryptocurrency market, particularly for Bitcoin and Ethereum.
