Crypto Journalist
Anas Hassan
Crypto Journalist
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December CPI and Real Earnings data releases at 8:30 AM ET today, as Bitcoin holds $92,000 following the recent clash between the Fed and the DOJ, during which Chair Powell made a rare appearance to the press, calling out President Donald Trump.
Headline CPI is expected at 0.3% monthly and 2.7% year-over-year (unchanged from November), while core CPI is forecast at 0.3% monthly and 2.7% annually (up from 2.6%).
Any upside surprise would validate current Powell’s caution about sticky inflation and cement the “higher for longer” narrative that sent Bitcoin tumbling from $101,000 to $92,000 after last week’s Fed decision.
Real Earnings data will show whether wage gains adjusted for inflation continue to support consumer spending, with November data showing 0.8% annual growth—modest gains that suggest workers aren’t keeping pace with price increases.
Analysts warn that data distortions from the government shutdown continue affecting December’s report, with shutdown-related disruptions creating artificially low baselines for goods and rental prices in November. Oxford Economics forecasts headline CPI above consensus at 0.4% monthly, citing these technical factors.
The timing is critical as markets also digest ongoing geopolitical risks and trade policy uncertainty that could pressure inflation higher through 2026.
With Fed rate cut odds for January 28-29 sitting near zero and March looking increasingly uncertain, today’s inflation print could either provide relief if it comes in softer than expected or reinforce the hawkish pivot if it shows acceleration.
Bitcoin’s technical setup remains under pressure with support critical at $88,000-$90,000 and resistance at $98,000. The total crypto market cap sits at $3.23 trillion as traders await clarity on whether the Fed made a policy error by signaling fewer cuts or correctly assessed that inflation remains too sticky to ease aggressively.
Strong CPI above 2.7% YoY would likely pressure Bitcoin toward $88,000, while a surprise downside miss below 2.5% could spark a relief rally back toward $98,000-$100,000. Real Earnings data matters because sustained negative real wage growth historically precedes consumer spending weakness and recession, which would be bullish for rate cuts but bearish for economic growth.
Markets are essentially trading the impossible balance: hoping for inflation cool enough to justify cuts, but growth strong enough to avoid recession.
CPI and Real Earnings: Final Test for Fed’s Hawkish Stance – How Does Crypto Market React?
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