US Fed Rate Cut Likelihood Rides High Pre-July CPI Data
- US CPI data’s impact on Fed rate policy draws attention.
- 82.5% probability for September rate cut.
- Market reactions driven by CPI data release.
Before the August 12, 2025 CPI release, the CME FedWatch Tool indicated an 82.5% probability of a September Fed rate cut, reflecting market predictions.
The high probability suggests anticipation of economic easing, potentially influencing cryptocurrency markets like Bitcoin and Ethereum due to rate expectations.
Before the release of the US CPI in August 2025, market forces put the probability of a Fed rate cut in September at 82.5%. The CME FedWatch Tool reflected these expectations based on futures pricing, aligning with the Bureau of Labor Statistics’ schedule.
The Federal Reserve, steered by Chair Jerome Powell, monitors data dependency for September decisions. The Bureau of Labor Statistics set the CPI release at 8:30 a.m. ET, shaping market participants’ expectations around monetary policy.
The high probability for a rate cut before the CPI release suggested markets were poised for policy easing. This impacted USD rates and risk assets, with cryptocurrencies like Bitcoin and Ethereum displaying sensitivity to inflation trends.
In anticipation, markets adjusted positions, reflecting potential easing. Data showed a 0.2% m/m and 2.7% y/y increase in CPI, fostering conditions favorable for risk assets and further impacting cryptocurrency valuations.
Historically, CPI prints support easing odds, reinforcing high market-implied chances of rate cuts. The Federal Reserve’s dual mandate and CPI data influence crypto markets, notably Bitcoin and Ethereum, steering trading strategies around macroeconomic events.
Jerome Powell, Chair, Federal Reserve, “The Fed’s September decision is guided by dual mandate objectives and incoming data; we remain focused on progress in inflation and the labor market.” – source
Analysts indicate a potential shift towards asset liquidity due to CPI trends. Indicators of disinflation support rate cuts, with implications for financial sectors dependent on macroeconomic monitoring. The BLS remains a key anchor for economic insights.
