US Inflation Expectations for February

The US market is eagerly waiting for the second inflation report of 2025. The report is scheduled to be released today.

The US market is eagerly awaiting the second inflation report of 2025, scheduled for release today. Analysts predict a slight drop in both headline and core inflation. If confirmed, this would be the first time since July 2024 that both inflation indicators have declined.

In January 2025, the core inflation rate rose from 3.2% to 3.3%. The consensus is for a slight decrease to 3.2% in February. According to TEForecast, a more pronounced reduction from 3.3% to 3.1% is anticipated.

After rising from 2.9% to 3% in January 2025, the US inflation rate is predicted to drop slightly from 3% to 2.9%.

If confirmed, this would be the first time both inflation indicators decline after a period of consistent increases.

In July 2024, the core inflation rate dropped from 3.3% to 3.2%, while the US inflation rate fell from 3% to 2.9%.

Since September 2024, the US inflation rate has been steadily rising. Meanwhile, the core inflation rate increased from 3.2% to 3.3% in September and remained at the same level for the next two months before dropping to 3.2% from 3.3% in December.

Kalshi traders are largely optimistic about a decrease in inflation, predicting a decline to 2.9%. Notably, Kalshi traders have accurately predicted at least six of the last eight CPI numbers.

US President Donald Trump recently imposed import tariffs on China, Canada, and Mexico. These aggressive trade policies have resulted in retaliatory tariffs and brought the global economy to the brink of a disastrous trade war.

Today’s inflation report will be the first to reflect inflation under Trump’s trade policies, which could have a significant impact on the cryptocurrency market.

If inflation cools down as predicted, it could affect the crypto market in several ways. A cooling inflation rate increases the likelihood of the Federal Reserve easing monetary policy, potentially leading to lower interest rates. This could create a more favorable environment for risk assets like cryptos, driving investor confidence. However, uncertainty surrounding Trump’s trade policies might cause crypto to experience heightened volatility, as global economic instability often pushes investors toward safe-haven assets like gold.

If inflation remains high despite expectations for a decline, the Fed may maintain a tight monetary policy, placing pressure on the broader financial and crypto markets.