Inflation Eases as U.S. Bond Market Faces Challenges

According to BlockBeats, the recently released March Consumer Price Index (CPI) showed a year-on-year increase of 2.1%, marking the largest monthly decline since 2020. This development provides the Federal Reserve with potential leeway for policy adjustments in its upcoming May meeting. BRN analyst Valentin Fournier noted that the easing inflation pressures might prompt the Federal Reserve to consider interest rate cuts and relax financial conditions. Following the CPI data release, Bitcoin stabilized at $80,000. However, spot ETFs recorded net outflows for the sixth consecutive day, the longest streak since February, indicating challenges in sustaining bullish momentum. On a positive note, Wall Street crypto funds may soon experience inflows, driven by factors such as cooling inflation, peak tariffs, and regulatory easing expectations with the appointment of new SEC Chairman Paul Atkins. While the market processes the positive inflation news, the U.S. bond market signals concern. The 10-year Treasury yield surpassed 4.5%, the highest since 2022, reflecting investor anxiety over the government's debt repayment capabilities. Douro Labs CEO Mike Cahill highlighted the complex scenario of low inflation data, bond market turmoil, and a 90-day tariff pause, exposing structural imbalances in the global economic system. Despite the Trump administration's announcement of a 90-day suspension on new tariffs, market concerns persist. Amberdata's research director Mike Marshall pointed out that the calming effect of the tariff pause is overestimated, as trade tensions continue to escalate. This policy uncertainty is reshaping capital flows, with predictions that funds will shift from the fragile bond market to digital assets with practical utility and programmable stability in the long term. Amid the dual signals of easing inflation and bond market crisis, the Federal Reserve's decision-making is in flux. BRN analyst Valentin Fournier believes that short-term pain may be exaggerated, and there is room for positive diplomatic efforts in trade tensions, potentially leading to breakthroughs in the coming weeks. However, the market is more focused on structural changes, with the policy direction of the new SEC Chairman being a potential key variable. If the promised 'crypto-friendly regulatory framework' is implemented as expected, it could instill institutional confidence in the crypto asset market.