- U.S. inflation expectations dropped to 4.1% from 4.5%.
- Bitcoin market monitors adjustments.
- Federal Reserve’s policy outlook may shift.
The University of Michigan’s early December survey revealed U.S. one-year inflation expectations dropped to 4.1%, below anticipated 4.5%, marking the fourth monthly decline and the lowest since January 2025.
Lower inflation expectations could ease Federal Reserve policy concerns, potentially boosting market sentiment, positively impacting risk assets like cryptocurrencies and equities through improved liquidity conditions.
Inflation Drop Signals Potential Fed Policy Shift
The University of Michigan’s consumer survey indicates inflation expectations for December fell to 4.1%, below the anticipated 4.5%. This decline of 0.4% marks the fourth consecutive monthly drop and suggests easing inflation pressures in the U.S.
This shift implies potential loosening of the Federal Reserve’s future policy. As inflation expectations temper, market analysts foresee a narrative favoring lower real rates, which could improve liquidity conditions for risk-sensitive assets.
Market participants, including economists and traders, are reacting to the data with increased interest. Some experts predict more favorable conditions for speculative assets like Bitcoin and Ethereum, supported by hopes of a more flexible monetary approach from the Federal Reserve.
Bitcoin Price and Market Cap Amid Inflation Changes
Did you know? The decrease in inflation expectations is the largest since January 2025, highlighting notable fluctuations in consumer sentiment and market expectations during that period.
Bitcoin is currently priced at $88,979.63, with a market cap of $1.78 trillion, according to CoinMarketCap data. In the past 24 hours, its trading volume was $63.83 billion, showing a decline of 3.43% over the same period.
The Coincu research team notes that recent fluctuations in inflation expectations could restructure Bitcoin and Ethereum’s market dynamics. Expectations of lower real yields may enhance these assets’ appeal, alongside a potentially stronger dollar.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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