“That’s when the deflationary impulse from falling oil prices should remind everyone that the Fed isn’t going to hike and that – if anything – the next move will be a cut,” Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance, said in a report.
If the currency’s strength is under question, then the barrier to bitcoin rising further also looks weaker. The two are known to be inversely correlated.
Some observers, however, are calling for caution, saying the market is overestimating the impact of oil prices on inflation. Elevated price pressures, they say, are now a structural issue.
“The Fed can’t declare victory simply because gasoline prices move lower. Sticky service-sector inflation is exactly why policymakers are likely to keep rates higher for longer, even if headline CPI continues moderating,” YCC Macro said on X.
Markets betting on aggressive easing may be underestimating how persistent underlying inflation really is,” YCC Macro added. Stay alert!
Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
