#CPIWatch : 📖 How do news affect crypto? A breakdown of CPI and NFP for beginners
Many beginners get lost when the market starts storming right as major economic news comes out of the United States. Let’s break down the key events of this week as simply as possible.
Recently, the Nonfarm Payrolls (NFP) report was released — it shows the number of new jobs. The data came in strong (162K), meaning the US economy is standing firmly on its feet. Today, the second most important indicator is coming out — the inflation index (CPI). The market forecast is 3.4%.
How is this related to Bitcoin?
It all comes down to the Federal Reserve’s (the US central bank) interest-rate decisions:
🔴 If CPI is higher than 3.4%: That means inflation is rising. To stop it, the Fed will raise the rate. Loans will become more expensive, the dollar will strengthen, and investors will start moving out of risky assets (crypto) into safer bonds. We’re expecting a dip.
🟢 If CPI is below 3.3%: Inflation is falling, and the Fed’s targets are being met. There’s no need to raise rates. For the crypto market, that’s the green light — Bitcoin could show a strong rally.
Tip: When news like this drops, volatility goes through the roof. For beginners, it’s better to stay on the sidelines and not trade with leverage!
Many beginners get lost when the market starts storming right as major economic news comes out of the United States. Let’s break down the key events of this week as simply as possible.
Recently, the Nonfarm Payrolls (NFP) report was released — it shows the number of new jobs. The data came in strong (162K), meaning the US economy is standing firmly on its feet. Today, the second most important indicator is coming out — the inflation index (CPI). The market forecast is 3.4%.
How is this related to Bitcoin?
It all comes down to the Federal Reserve’s (the US central bank) interest-rate decisions:
🔴 If CPI is higher than 3.4%: That means inflation is rising. To stop it, the Fed will raise the rate. Loans will become more expensive, the dollar will strengthen, and investors will start moving out of risky assets (crypto) into safer bonds. We’re expecting a dip.
🟢 If CPI is below 3.3%: Inflation is falling, and the Fed’s targets are being met. There’s no need to raise rates. For the crypto market, that’s the green light — Bitcoin could show a strong rally.
Tip: When news like this drops, volatility goes through the roof. For beginners, it’s better to stay on the sidelines and not trade with leverage!