The latest Consumer Price Index (CPI) landed at 3 %, cooler than forecast, prompting traders to price a 97 % chance that the Federal Reserve will soon lower interest rates. A looser policy path tends to ripple across markets, affecting bonds, currencies, and risk assets like Bitcoin. The key question is how these shifting odds translate into BTC performance amid evolving macro conditions.
The 3 % CPI eased pressure on Fed officials and wagers on a near-term cut spiked, reshaping expectations across the curve. When odds shift, the yield curve bends and short-term Treasury payouts usually drop, altering relative appeal among asset classes and funding conditions.
Analysts note that money can drift toward either risk plays or non-dollar safe harbors as yields fall. CPI tracks what households pay for a fixed basket of goods and services, and the Fed watches it closely when setting rates. Crypto reacts hard because coins move in step with risk appetite and dollar liquidity; if rates fall, the penalty for holding zero-coupon BTC instead of interest-paying paper shrinks, and prices tend to lift as long as global cash stays plentiful.
What it means for Bitcoin
In adoption and flows, cheaper money cuts the yield on short-dated Treasuries, and more capital can rotate into risk assets, BTC included, as the opportunity cost declines. Expected extra cash can calm swings for a while, yet any sudden revision in the outlook can still jolt crypto prices as positioning adjusts.
The next set of macro numbers and Fed statements will decide what happens, and the 97 % odds represent today’s consensus, not tomorrow’s guarantee. Traders will keep close tabs on CPI updates and cut probabilities in the weeks ahead, gauging whether easier policy sustains support for Bitcoin or revives volatility across risk assets.
