“That’s when the deflationary push from falling oil prices should remind everyone that the Fed is not going to raise rates and that, if anything, the next step will be a cut,” Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance, said in a report.
If the currency’s strength is in doubt, then the barrier to bitcoin’s rise also appears weaker. Both are known to be inversely correlated.
Some observers, however, urge caution, saying the market is overestimating the impact of oil prices on inflation. High price pressures, they say, are now a structural issue.
“The Fed can’t claim victory simply because gas prices are falling. Persistent service sector inflation is exactly why policymakers are likely to keep rates higher for longer, even if the headline CPI continues to moderate,” YCC Macro said in X.
“Markets betting on aggressive easing may be underestimating how persistent underlying inflation really is,” YCC Macro added. Stay alert!
Read more: For an analysis of current activity in altcoins and derivatives, see Crypto Markets Today. For a complete list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
