US CPI Today: How Will Crypto Markets React to February Inflation Data?

The US market is on edge as it awaits the second inflation report of 2025, set to be released today. Analysts predict a slight drop in both headline and core inflation—a shift that, if confirmed, would mark the first decline in both indicators since July 2024.

Why does this matter? Inflation trends play a huge role in shaping market sentiment, interest rates, and even cryptocurrency movements. With the Federal Reserve’s next steps hanging in the balance and Trump’s aggressive trade policies adding uncertainty, today’s report could set the tone for the months ahead.

Will inflation finally cool down, or will the numbers deliver an unexpected shock? Investors are watching closely. Here’s what to expect.

Inflation Trends: What to Expect

In January 2025, the core inflation rate rose from 3.2% to 3.3%. Market consensus now suggests it will drop back to 3.2% in February, while TEForecast predicts a sharper decline to 3.1%.

The overall US inflation rate also increased in January, moving from 2.9% to 3%. However, analysts expect it to ease back to 2.9% in February.

If these forecasts hold, it will be the first time both inflation indicators have fallen together since July 2024, when core inflation dipped from 3.3% to 3.2% and overall inflation from 3% to 2.9%.

Understanding Inflation Patterns

Since September 2024, inflation has been rising steadily. The core rate climbed from 3.2% to 3.3% that month and stayed at that level for two months before slipping back to 3.2% in December.

Markets are hopeful that inflation will finally ease. Kalshi traders, who have accurately predicted 6 of the last 8 CPI figures, expect headline CPI to drop to 2.9%. If correct, this could further strengthen market confidence.

Trump’s Trade Policies Put to the Test

US President Donald Trump Donald Trump   Donald J. Trump is a US-based entrepreneur, Pro-crypto Politician, and the 45th and 47th President of the United States of America. He understands the importance and needs of the modern fintech world, and people look up to him as a dominant pro-crypto leader.   Quick Facts   Full name Donald John Trump Birth 14-06-1946, New York, United States Nationality American Education BS from the University of Pennsylvania Known For Businessman, Pro-Crypto Politician   Once doubtful about Bitcoindominance, he said in a tweet in 2019, “I am not a fan of Bitcoin", but now has a significant amount of cryptocurrency holdings in his kitty. He has also signed an Executive Order to establish a Strategic Bitcoin Reserve, which highlights his commitment to the future of cryptocurrency.   Donald Trump - Career Highlights & Events   2016 – Elected as the 45th President of the United States from the Republican Party.   2017 – Signed the Tax Cuts and Jobs Act, impacting investment environments   2019 – Criticized Bitcoin and Libra on X, dubbing them as "not money"   2024 – Campaign signals potential openness to crypto-friendly reforms   2025 –  Elected as the 47th President of the United States from the Republican Party.   A meme coin, $TRUMP, is associated with Donald Trump, which is listed on the Solana blockchain platform. His family also backs World Liberty Financial (WLF), a crypto venture.     President recently imposed import tariffs on China, Canada, and Mexico. His aggressive trade policies have triggered retaliatory tariffs and pushed the global economy to the brink of a disastrous trade war. 

Today’s inflation report will be the first to show how Trump’s trade measures are affecting inflation, making it a crucial economic indicator.

What It Means for Crypto Markets

If inflation drops as expected, it could impact the cryptocurrency market in several ways. Lower inflation increases the chances of the Federal Reserve loosening monetary policy, potentially leading to lower interest rates. This would create a more favorable environment for risk assets like cryptocurrencies, boosting investor sentiment.

However, uncertainty remains. Trump’s trade policies could cause market volatility, as economic instability often pushes investors toward safe-haven assets like gold. On the other hand, if inflation stays high, the Fed may keep monetary policy tight, putting pressure on both traditional and crypto markets.

If the numbers align with expectations, markets could breathe a sigh of relief—but a surprise twist could shake things up.