Catenaa, Thursday, August 14, 2025- Bitcoin and ether prices climbed this week following the release of July’s US inflation data, as markets priced in a higher likelihood of a Federal Reserve rate cut in September.
The probability of a cut surged above 93%, according to the CME FedWatch tool, up from low 80% levels before the data.
Consumer prices rose 2.7% year over year in July, slightly below expectations, while core inflation, which excludes food and energy, accelerated to 3.1%, just above forecasts. Monthly increases matched estimates with headline CPI up 0.2% and core CPI rising 0.3%.
The softer headline reading fueled optimism among traders, pushing bitcoin closer to $120,000 and ether above $4,400 shortly after the data release.
Analysts noted the growing influence of macroeconomic indicators on crypto markets, especially amid strong ETF flows tied to Federal Reserve policy expectations.
Despite bullish sentiment, Federal Reserve Chair Jerome Powell’s focus on 12-month inflation leaves uncertainty around the timing of rate cuts, as rising core inflation remains a concern.
Analysts highlighted the market’s cautious stance, with smart-money flows shifting into stablecoins and select altcoins as a hedge against volatility.
Investors said that they now await upcoming producer-price data and Fed communications for clearer guidance on monetary policy.
The sustained impact of easing inflation expectations on crypto prices depends on continued spot ETF inflows beyond immediate post-data rallies.
