Return of Inflation or Continued Decline? Core CPI Takes Center Stage

Today marks the release of one of the most critical U.S. economic indicators: the Core Consumer Price Index (Core CPI), which could determine the next direction for the dollar, interest rates, and even global markets.

In light of recent statements from the Federal Reserve Chair emphasizing continued restrictive policies until inflation stabilizes, today’s data carries heightened significance. Traders across forex, gold, equities, and crypto markets are braced for a figure that could trigger a substantial new wave in the markets.

From Trump’s Pressure to Tariff Suspensions: Why Today’s Data is pivotal for the Market?

In recent months, the economic landscape of America has been affected by political tensions and unexpected governmental decisions. Donald Trump’s persistent pressure on the Federal Reserve to cut interest rates has been met with Jerome Powell’s cautious response. Powell has explicitly stated that interest rate reductions will not be on the agenda until a downward trajectory in inflation is firmly established.

Meanwhile, the U.S. government’s imposition of heavy import tariffs sparked chain reactions in markets. However, with the suspension of these tariffs for 90 days, tensions have eased slightly, leading to positive growth in assets such as gold, Bitcoin, and stock indices.

Now, all eyes are on the Core CPI data; data that could reveal whether inflation is truly under control or if it continues to cast its shadow over monetary policy.

Market Expectations for Core CPI: Will Inflation Surge Again?

Based on forecasts, the Core CPI for the U.S. in April is expected to show a growth of 0.3 %. This comes after last month’s CPI figure of 0.2 %, which marked a significant decline from previous records.

In recent months, the overall trend of core inflation has exhibited mild fluctuations and has failed to outline a clear path for policymakers. The figure of 0.4 % in February was an unexpected rise that propelled the dollar’s strengthening, but the anticipated drop to 0.2 % in March has rekindled the possibility of interest rate reductions.

Now, with the arrival of the new data, traders are searching for signs that indicate whether inflation is once again surging or if it remains firmly under controlled conditions.

CPI Scenarios and Their Impact on Financial Markets

The final figure could significantly sway expectations for future Federal Reserve’s policies. Currently, traders are weighing two primary scenarios:

If the data exceeds 0.3 %, likely dollar strength, gold declines, and stocks market pressure, signaling resurgent inflation risks that may lead the Federal Reserve to prolong interest rates.

Conversely, if the data meets expectations or falls below them, Increased optimism for rate cuts, potentially weakening the dollar, boosting gold, and higher risk-taking in the stock and cryptocurrency markets.

In such conditions, the moments following the data release could create swift trading opportunities, particularly for scalpers and active traders. By utilizing the Trendo trading platform, you can monitor the data and execute trades in the quickest possible time.

Conclusion | The Federal Reserve’s Decision Depends on Data; Be Prepare for Any Scenario

While markets have experienced a positive atmosphere in post-tariff suspension conditions, the Core CPI for April could dictate whether this momentum continues. Despite the Federal Reserve's cautious stance, only a strong resurgence of inflation could prolong the path of contractionary policies.

For traders, the most critical aspect in such days is risk management, swift reaction, and the use of multi-faceted analyses. Regardless of the final figure, market directions will hinge on a blend of economic data and price action.

To navigate market behavior following this data release, We recommend viewing the weekly analysis of Trendo—covering gold, oil, Bitcoin, and the dollar index technical analysis—offer critical insights for informed decision-making.