16.07.2025 22:27
The unexpectedly weak Producer Price Index (PPI) report released on Wednesday has significantly increased pressure on the Federal Reserve to lower interest rates, potentially as early as the July FOMC meeting. This development is exceptionally positive for risk assets, and the cryptocurrency market is already reacting strongly.
Bitcoin has surged past the $119,000 mark, but altcoins are dominating the headlines. Ethereum is up over 7% on the day, trading above $3,200. The entire Ethereum ecosystem is experiencing robust growth; Ethereum Name Service (ENS), for example, boasts a remarkable 20% increase, the second-highest among the top 100 cryptocurrencies. Other notable performers include Floki, Mog Coin, and Arbitrum, all showcasing double-digit gains. Simultaneously, Solana meme coins are experiencing a surge in popularity, with SPX6900 reaching an all-time high after a 22% daily jump. Bonk, Official Trump, PUMP, and Dogwifhat are also among the top-performing meme coins.
The subdued PPI figures, showing a year-over-year increase of just 2.3% in June (compared to the predicted 2.5%), lend support to the arguments—including those made by President Donald Trump—that the Federal Reserve's target rate is excessively high. Core PPI also softened, registering 2.6% against expectations of 2.7%. This follows Tuesday's Consumer Price Index report, which also indicated easing inflation, further bolstering the case for rate cuts.
It's important to note that the PPI excludes import prices, meaning it doesn't fully reflect the inflationary impact of President Trump's tariff policies. Nevertheless, the combined effect of the soft PPI and CPI data strengthens the expectation of rate cuts. The CME FedWatch tool currently projects two rate cuts in 2025.
