Inflation Slows Down, But Crypto Stays Flat
inflation cooled more than expected in February, bringing hope that teh Federal Reserve might soon cut interest rates. Yet, the crypto market didn’t react much to this positive economic news.
Wednesday’s Consumer Price Index report showed inflation at 2.8% over the past year, down from 3% in January.This was slightly better than the 2.9% economists predicted. Despite this, bitcoin was trading at $82,770.45, with little change over 24 hours. the total crypto market value was $2.68 trillion, down 0.25%.
dr. Youwei Yang, Chief Economist at BIT Mining, explained why crypto didn’t react. He said the market is worried about policy risks, especially President Trump’s new trade tariffs.
Yang noted that while lower inflation should be good news, suggesting faster rate cuts, the crypto market needs more than one good report to regain confidence. He pointed out that Trump’s tariffs on steel and aluminum could make inflation stickier and harm market stability.
- Trump’s tariffs have already led to Europe’s retaliatory measures on $28 billion worth of U.S. goods.
- These tariffs create a tough position for the Federal Reserve.
Yang said, “High inflation from tariffs makes rate cuts harder. But market crashes and job losses pressure the Fed to cut rates sooner. cutting too early could reignite inflation.”
Crypto markets want clearer policy signals. Yang noted that investors need stronger support from the White House or Fed. The recent crypto White House summit didn’t provide enough guidance on crypto regulations, leaving markets uncertain.
Until clearer signals emerge,fear and uncertainty will continue to weigh on crypto market sentiment.
