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Will the US November CPI experience a 'dramatic plunge'? Wall Street urgently warns: Don't be fooled, crypto investors!
The lowest inflation data in four years is hitting unexpectedly, yet Wall Street collectively labels it as 'distorted'—the US November core CPI only rose 2.6% year-on-year, hitting a new low since early 2021. This should have been a market-triggering positive, but institutions like Goldman Sachs and Wells Fargo are warning in unison: 'The data is so inflated that it needs to be swallowed with a whole jar of salt!'
The truth lies in the shadow of the government shutdown: the October CPI is directly missing due to the shutdown, and the Bureau of Labor Statistics used the 'carry forward method' to fill in the gap with old data from six months ago, resulting in the growth rate of housing rents—accounting for one-third of the CPI—nearly reaching zero, with bizarre declines in airfares and clothing prices. This kind of 'statistical illusion' has led to the report being criticized as riddled with holes like Swiss cheese.
For the crypto market, this data feels more like a 'noise bomb'. After the data was released, federal funds futures showed that the probability of a rate cut in January next year only slightly increased from 26.6% to 28.8%, with the annual easing expectation being just 64 basis points. The Federal Reserve clearly wants to wait for the December CPI before making any judgments. Previously, cryptocurrencies had already experienced a spike in volatility due to the data vacuum, with Bitcoin's daily volatility increasing by 28% and the USD Coin showing extreme fluctuations.
The key signal is clear: inflation is indeed cooling, but it is not as exaggerated as the data suggests, and the distortion may last until next spring. For crypto investors, do not be blinded by the headline effect of a single month's data; the Federal Reserve's policy is unlikely to make a sharp turn due to this seemingly favorable data, and aggressive rate cuts are likely to be delayed. Compared to the distorted official data, on-chain liquidity and whale holdings, among other real-time indicators, may be more valuable for reference.
As the year-end data surge approaches, do you think the December CPI will expose the statistical illusion? How will the Federal Reserve's rate cut rhythm next year affect Bitcoin and Ethereum trends?
