The U.S. Department of Labor is set to release the Consumer Price Index (CPI) data for January today at 16:30 GMT. Expectations indicate a monthly increase of 0.3%, falling short of December’s 0.4% rise. Core inflation is anticipated to rise from 0.2% to 0.3%, although it is projected to decline year-on-year to 3.1%. Overall, lower-than-expected data may boost demand for risky assets like Bitcoin (BTC) 
$75,023 and altcoins, although experts caution against expecting significant price surges in such a scenario.
U.S. Inflation Data and Fed Rate Cuts
Should the inflation data come in below expectations, there may be an early possibility of the Fed lowering interest rates. Rate cuts typically lead to falling bond yields and a weakening U.S. dollar, which could increase interest in risky assets like Bitcoin.
However, economists warn that the Fed’s stance on inflation may not change despite this month’s data. RBC’s weekly report suggested that the progress in inflation may not be strong enough to prompt the Fed into additional rate cuts. Similarly, BlackRock indicated that ongoing price pressures in the service sector could compel the Fed to maintain higher rates for an extended period.
Rising Expectations for Inflation
Two-year inflation swaps, which indicate market inflation expectations, have surged to 2.8%—the highest level since the beginning of 2023. This reflects investor sentiment that inflation is likely to rise in the future, prompting preemptive measures.
If the January CPI data exceeds expectations, Bitcoin’s price may trend toward the lower end of the current range of $90,000 to $110,000. Additionally, Fed Chairman Jerome Powell’s emphasis on not rushing into rate cuts may cultivate a more cautious atmosphere in the cryptocurrency market.
