TLDR:

U.S. CPI cooled to 3.0%, below expectations, signaling easing inflation and stronger rate cut odds.
Market data from Polymarket shows a 97% probability of a Fed 25 bps rate cut next meeting.
Analysts say easing yields and softer dollar could push liquidity into crypto and risk assets.
Traders eye Q4 as policy shifts, liquidity returns, and crypto assets prepare for a breakout run.

The latest U.S. inflation data just flipped the market script. The Consumer Price Index came in lower than analysts had expected, landing at 3.0%. Traders are now convinced the Federal Reserve will shift gears sooner than thought. 

According to Polymarket, odds for a 25-basis-point rate cut have surged to 97%. That kind of probability rarely appears unless markets see a clear signal from economic data.

Inflation Eases as Crypto Market Eyes Policy Pivot

Crypto analyst Bull Theory said in a post on X that the softer CPI reading proves tightening measures have worked. 

Inflation cooling below expectations even under high tariffs indicates fading price pressures. The message to the Fed, he said, is direct: the job is done, and the time for easing is near.

That easing could start with ending Quantitative Tightening earlier than markets projected. Traders now anticipate that the Fed could announce such a move in its next policy meeting. With liquidity poised to return, risk assets, including crypto, are preparing for an upward run.

As Bull Theory outlined, falling yields and a weaker dollar would push funds toward higher-return assets. He added that fresh catalysts, from new altcoin ETPs to the Treasury’s expected TGA liquidity release, strengthen this setup. 

The alignment of monetary easing and capital inflows builds the foundation for a risk-on Q4.

For crypto traders, the takeaway is clear: policy winds are shifting. With the Fed hinting at flexibility and markets betting on cuts, liquidity could soon return to digital assets.

CPI Data Turns Crypto Sentiment Bullish

Toknex, another market watcher, shared that the 3.0% CPI reading marks a direct line from inflation to crypto prices. 

When inflation cools, the Fed pulls back on tightening. As liquidity opens, capital exits safe assets like bonds and moves toward crypto. That’s how, as Toknex put it, “a small number flips the whole market.”

The 97% odds on Polymarket reinforce that sentiment. Such probability suggests that traders almost fully expect the Fed to cut rates in the next window. For crypto markets, a rate cut could mean renewed risk appetite, cheaper leverage, and expanding liquidity.

Analysts believe the combination of easier monetary policy and incoming institutional catalysts could drive the next leg of market growth. 

More than 100 altcoin ETPs, potential regulatory clarity through the Clarity Act, and big banks opening crypto trading channels are all feeding into this optimism.

While traders have seen policy pivots before, this one arrives with clear data support. Inflation has cooled, the Fed’s tone is softening, and liquidity is already leaking back into markets. As a result, risk assets, led by crypto, are regaining momentum as Q4 heats up.

The post U.S. CPI Data Dips as Fed Rate Cut Odds Hit 97%: What’s Next for Crypto? appeared first on Blockonomi.

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Filed under: Bitcoin - @ October 24, 2025 2:25 pm