2026-01-20 05:29:15

The signals of cooling inflation are very clear—The latest December core CPI data released in the US shows a year-over-year increase of 2.6%, breaking the market expectation of 2.7%. How critical is this number? It is the lowest level since March 2021.

Once the news broke, the market immediately responded. Traders began recalculating the Federal Reserve's interest rate cut timetable, with the probability of a rate cut in April rising to 42%. This is not just a numerical change on paper but a genuine adjustment in expectations that affects capital flows.

Federal Reserve observer Nick Timiraos later commented that this soft data further confirms that inflation is on a downward trend. Meanwhile, US President Trump also took advantage of this momentum to once again pressure the Fed, openly hoping to see a "big and handsome rate cut."

Of course, it is still premature to say that inflationary pressures have been completely eliminated. Food prices are still rising, but the key point is—continuous data surprises are accumulating. Every report that exceeds expectations adds bargaining chips to the Fed's policy adjustments.

What does this mean? It suggests that the liquidity environment may be improving. For risk assets like Bitcoin and Ethereum, expectations of loose monetary policy are often important catalysts for their rise. The subsequent impact of this inflation report in the first quarter of 2026 warrants ongoing attention.

BTC0,85%

ETH1,16%

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MerkleDreamer

· 22h ago

Wait, is 2.6% CPI really good news? Food prices are still rising, feels a bit exaggerated. When expectations of rate cuts emerge, the crypto market starts to get restless—I've seen this pattern too many times. Trump's pressure is also part of it; they really blow any wind into the sails. But on the other hand, a bit more liquidity is indeed beneficial for us.

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DeFiAlchemist

· 01-20 05:59

the algorithmic equilibrium is shifting... 2.6% vs 2.7% sounds small but this is the transmutation catalyst we've been waiting for. liquidity about to flood back into risk assets, watch the yield dynamics ripple through defi protocols next quarter.

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MissingSats

· 01-20 05:58

The rate cut expectations are at their peak. Bitcoin, it's time to wake up, right? Wait, are food prices still rising? The data looks good, but the wallet is what really matters. Once again, Trump is exerting pressure. The Federal Reserve's days are not easy. Liquidity is here. Should I buy the dip or run? CPI hitting a new low—should we just look bullish? Don't get too optimistic too early. Will there really be a rate cut in April? Should I go all-in right now? Can this data hold until Q2? It doesn't seem very likely.

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OnChainArchaeologist

· 01-20 05:57

The expectation of interest rate cuts is also coming together; this move still depends on the Federal Reserve's actual actions. We've seen too many verbal easing signals.

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GateUser-a180694b

· 01-20 05:57

The expectation of interest rate cuts has emerged, but don't rush to jump in... Is inflation really that easy to solve? Food prices are still rising, it feels like just a false signal. Watching policy games unfold, Trump is putting pressure again. This trick won't last more than a few months before it repeats. A 42% probability sounds great, but who knows what will happen in April? The market is very unpredictable. If liquidity truly improves, the crypto world will have a good celebration. 2.6% looks good, but the question is about sustainability. What can one data point really tell us? But there is indeed some interest; Bitcoin has to follow this wave of expectations in the past couple of days. This data was priced in so quickly, it makes me feel more and more that there's a bubble being inflated. Trump's "beautiful rate cut" will probably fall flat nine times out of ten. Just wait to be proven wrong.

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WenMoon

· 01-20 05:53

42% chance of rate cut, is the crypto market about to take off again? But this time, the inflation data doesn't feel as solid; food prices are still rising. --- Trump urges rate cuts, will the Federal Reserve really listen? Anyway, liquidity has loosened, BTC will definitely benefit. --- 2.6% breaking expectations, traders are starting to dream again, hoping this isn't just another false alarm. --- With expectations of easing, the feast of risk assets has begun. Are you still on the sidelines? --- The key is when food prices will truly stabilize; CPI numbers looking good isn't enough. --- Liquidity improvement = crypto prices rise, this logic is old news, just waiting for the Fed to take real action. --- Don't be too optimistic; every time there's a "better than expected" report, it's easy to get disappointed. I'm still holding cautiously.

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