The King cryptocurrency ETF’s final approval announcement has pushed its value above $47,000, with altcoins outpacing Bitcoin‘s gains as Bitcoin Dominance Index loosens, showing double-digit profits. Ethereum’s price surpasses $2,600, fueled by the excitement around a potential spot ETH ETF, which bolsters the rise in altcoins, with Ethereum continuing the day with a 10% gain.
The US Federal Reserve (Fed) is set to announce its first interest rate decision of the year at the end of January, with no changes expected. However, the tone used by Fed Chair Powell will be crucial, especially after disappointing employment data. Today’s inflation data was highly anticipated, with markets expecting a 150 basis point rate cut this year, though Fed members seem to favor a 75 basis point reduction.
The speed and timing of interest rate cuts are significant for the risk markets, suggesting a substantial rally if cuts occur sooner. The continuation of the inflation decrease is vital for an optimistic scenario. December’s inflation expectation was a slight increase to 3.2% annually, with a monthly increase of 0.2% anticipated.
The critical expected decrease was in Core Inflation, with a projection of 3.8% against the previous 4%. The actual data reported was 3.4% for headline inflation (against an expectation of 3.2% and a previous 3.1%) and 3.9% for Core Inflation (against an expectation of 3.8% and a previous 4%).
The reported data, while weakly against cryptocurrencies, shows a decrease in core inflation, which is optimistic. However, the increase in headline inflation could lead to a temporary decline and may prompt a hawkish tone at the end-of-month meeting.