The US stock market and the global cryptocurrency market are facing renewed selling pressure ahead of the release of US CPI inflation data today. JPMorgan, Morgan Stanley, Citigroup and other Wall Street giants expect a higher-than-expected CPI reading, raising the risk of a Fed rate hike and a sell-off in Bitcoin, Ethereum (ETH) and Ripple.
US CPI inflation estimates by JP Morgan and other Wall Street giants
after Nonfarm payroll data This indicator came much higher than expectations, and investors are awaiting the release of inflation data in the US Consumer Price Index today. An upward surprise in inflation or even in line with expectations could kill hopes for a rate cut from the Fed, leading to a collapse in Bitcoin, ETH, and XRP.
Wall Street giants JPMorgan, Morgan Stanley, Deutsche Bank, Barclays, Citigroup and Jefferies expect May CPI inflation to reach 4.3%. While Bank of America, Goldman Sachs, UBS and Wells Fargo expect the inflation rate to reach 4.2%.
Core CPI is expected to rise amid the latest data Escalation of the US-Iran warDespite President Trump indicating progress in peace talks. It is worth noting that Wall Street giants are also skeptical about a Fed rate cut this year despite steady inflation, rising oil prices and a strong US labor market.
The CME FedWatch tool shows a 42.9% chance of a Fed rate hike by December 2026. Two-year and 10-year U.S. Treasury yields are also rising, suggesting that bond market traders are betting on a Fed rate hike.
Economists expected headline inflation in the United States The inflation rate rose to 4.2% in May, hitting its highest level since April 2023, from 3.8% in April. The data indicated a slower rise of 0.5% month-on-month, after a 0.6% rise in April.
Meanwhile, core CPI inflation is expected to reach 2.9% year-on-year, a new high from 2.8%. Core CPI inflation in April. Monthly inflation is expected to slow to 0.3% from 0.4% previously.
Could Bitcoin, ETH, and XRP prices fall further?
The prices of the top three crypto assets, Bitcoin, Ethereum, and Ripple, are falling ahead of the US Bureau of Labor Statistics’ release of the US Consumer Price Index for May. This happened as well The odds of the CLARITY Act passing have decreased Less than 50%.
Amid multiple macro and technical headwinds, Bitcoin, Ethereum, and Ripple prices could decline. As CoinGape reported, Wall Street experts expect the Fed to keep interest rates steady at First meeting of the Federal Open Market Committee (FOMC) by Fed Chairman Kevin Warsh.
Bitcoin is trading near $61,260 ahead of the release of CPI inflation data. Trading volume has increased slightly, indicating increased interest among some traders.
Meanwhile, analyst Ted Bellows noted that Ethereum failed to break its February lows and is now on its way lower. He added that the next support area for Ethereum is $1,550, and failure to hold it means ETH will fall to new lows.
On the other hand, XRP price fell by 5% to $1.11 over the past 24 hours. On-chain data indicates a rally ahead. Trading volume fell by more than 17%.
“Bitcoin fell by $21,000 in 30 days, and that’s not MicroStrategy’s fault. When the CPI hit 3.8% on May 12, we flagged inflation as a headwind the next day,” 10x Research said.
The research firm claimed that today’s US CPI inflation is key to global markets. Bitcoin needs to print less than 4% to recover. “Our model suggests that the market is underestimating inflation,” 10X Research added.
