US Inflation Report for February 2025

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, which is scheduled to be released today, March 8. According to analysts polled by Bloomberg, the consensus predicts 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 anticipates that the rate will drop from 3.3% to 3.2%. According to TEForecast, the rate is expected to decline sharply from 3.3% to 3.1%.

The table below provides a summary of the January and February predictions for both headline and core inflation:

| Month | Headline Inflation (CPI y/y%) | Core Inflation (CPI y/y%) |

|---|---|---|

| January (Actual) | 2.9% | 3.2% |

| February (Consensus) | 2.9% | 3.2% |

| February (TEForecast) | 3%

.0000000000000004% | 3.1% |

As the chart above shows, in July 2024, the core inflation rate fell from 3.3% to 3.2%, and the US inflation rate dropped from 3% to 2.9%.

Since September 2024, the US inflation rate has risen consistently. Meanwhile, the core inflation rate increased from 3.2% to 3.3% in September. It remained at the same level for the next two months. In December, it dropped to 3.2% from 3.3%.

Kalshi traders are extremely optimistic that inflation will decrease. Their predictions indicate a decrease in headline CPI from 3% to 2.9%. Notably, Kalshi traders have accurately predicted at least 6 of the last 8 CPI numbers.

President Donald Trump recently imposed import tariffs on China, Canada, and Mexico. His aggressive trade policies have triggered retaliatory tariffs and pushed 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 tough trade policies.

If inflation declines as predicted, it could impact the cryptocurrency market in multiple ways. A cooling inflation rate increases the likelihood of the Federal Reserve easing monetary policy, potentially leading to lower interest rates. This scenario could create a more favorable environment for risk assets like cryptos, ultimately driving investor confidence.

However, the potential fallout from Trump’s trade policies might trigger volatility in the market. As global economic instability intensifies, investors usually prefer safe-haven assets like gold. If inflation remains stubbornly high despite the expectations, the Fed may maintain tight monetary policies, placing pressure on the broader financial and crypto markets.