US CPI Expected to Rise 0.23% Monthly 2.6% Annually

The upcoming release of the US Consumer Price Index (CPI) and Core CPI data on Tuesday is anticipated to trigger significant market volatility. This data release is crucial as it will provide insights into the inflationary pressures in the US economy, which have been influenced by recent tariff policies. Analysts predict that the CPI is expected to rise by 0.23% on a monthly basis and 2.6% on an annual basis, while the Core CPI, which excludes volatile food and energy prices, is forecasted to increase by 0.30% monthly and 3.0% annually. These projections indicate a notable acceleration in inflation compared to the previous month, where inflation was softer than anticipated.

The tariffs implemented by the administration are expected to be a significant driver of this inflationary trend. Economists anticipate that the rise in core goods prices, influenced by these tariffs, will be a primary factor in the acceleration of inflation. Additionally, there is an expected uptick in prices for services such as hotels, airfares, and medical services. However, falling shelter prices and the potential downward pressure from automobile prices could offset some of the inflationary pressures.

The Federal Reserve has been closely monitoring these economic indicators, and the upcoming CPI data will play a pivotal role in their decision-making process regarding interest rates. Currently, the bond futures markets indicate a 60% probability of an interest rate cut by the Federal Reserve in September. This decision will be influenced by the actual inflation data released on Tuesday. If the inflation data comes in lower than expected, it could increase the likelihood of a rate cut, as more dovish members of the Federal Open Market Committee may advocate for a more accommodative stance.

The release of the CPI and Core CPI data is scheduled for Tuesday, July 15, at 8:30 a.m. Eastern time. This data will be closely scrutinized by investors and economists alike, as it will provide critical insights into the state of the US economy and the potential impact of recent tariff policies. The volatility expected in the cryptocurrency market underscores the significance of this data release, as it will influence market sentiment and investment decisions.

Top among the economic indicators expected this coming Tuesday are the US CPI and Core CPI data. For context, the US CPI provides data about the change in the price of goods and services purchased by consumers over a specific period. It differs from the Core CPI, which covers the change in price of goods and services, excluding food and energy. Notably, the CPI and Core CPI data, which reflect consumer prices, account for the majority of overall inflation, which in turn is a crucial indicator for currency valuation. It is worth knowing that the Federal Reserve relies on these indicators to make interest rate decisions for its inflation containment mandate.

Typically, an ‘actual’ CPI or Core CPI figure greater than what the ‘forecast’ says favors the local currency, in this case, the US dollar. Hence, economic analysts are focusing on the 0.3% forecast for both the CPI and Core CPI indicators to predict the short-term direction of the markets. Meanwhile, it is crucial to note that the outcomes of these figures do not always determine the market direction. Investors and analysts also focus on the reports from the Fed’s executives to ascertain whether they portray a hawkish or dovish outlook for the markets in the short to medium term. These events accumulate to trigger reactions from traders and investors, leading to increased market volatility.

Altcoin bulls are hopeful that the outcome of this week’s economic events will support the rediscovered bullish sentiment and boost crypto prices. Such an outcome could trigger another rally phase that could see some top altcoins like ETH and XRP continue to surge and pursue record prices.