Soft inflation data could push Fed to cut rates, but gloomy macro picture persists: analysts

Crypto markets lulled following Thursday’s report, which showed an overall decline in U.S. inflation last month — the first meaningful drop in prices since 2020 and 2021 — according to the Bureau of Labor Statistics.

Although March data did not consider the latest tariff blowback, there’s a chance the Federal Reserve would “cut rates and ease financial conditions” at May's policy meeting, wrote Valentin Fournier, analyst at BRN, in a Friday note. That potential outcome could be a springboard for bitcoin, cryptocurrencies and traditional assets, Fournier added.

Bitcoin steadied after the soft inflation print and held above the $80,000 mark, trading around $82,300 at press time, according to The Block’s price page. The broader digital asset market grew less than 1% on April 11 as majors like ether and Solana swung between gains and losses on the day. Spot BTC ETFs recorded a sixth straight day of outflows, likely due to fresh U.S.-China tariff jockeying. “Persistent outflows underscore the market’s inability to sustain bullish momentum over multiple sessions,” BRN’s Fournier noted.

However, the analyst also surmised that crypto funds on Wall Street could witness a strong capital intake soon. “Multiple positive catalysts are aligning: inflation is easing, tariffs are likely peaking, and Paul Atkins has been officially sworn in as the new SEC Chair, with markets optimistic he will bring a more crypto-friendly regulatory stance,” said Fournier. “While volatility will remain elevated, the risk of an extended downturn appears limited. We believe the short-term impact of the U.S.-China trade tension is overstated and a positive resolution could emerge in the coming weeks."

Macro unrest looms over inflation optimism

Some experts believe the March Consumer Price Index (CPI) may factor little in the Fed’s rate decision while tariffs and trade wars weigh on the global financial system. U.S. Treasuries sold off this week as stock markets and bonds slumped. President Donald Trump himself called the bond market “tricky” on Wednesday, fueling speculations that the White House capitulated on import duties based on the unease.

On Wednesday, the benchmark U.S. 10-year Treasury Yield raced to over 4.5%. Treasury yield indicates the return on bonds. Increased yield means falling bond prices, which signal low investor confidence in the government’s ability to repay debts.

“Right now, the bond market’s breaking down while inflation cools and tariffs get delayed. This isn't a clean macro reset; it’s a signal of structural imbalance,” Mike Cahill, CEO of Douro Labs, shared via email. “Low CPI, a collapsing bond market, and a 90-day tariff pause all work together to paint a very murky picture. The Fed might be getting breathing room, but the global system is still showing signs of tremendous stress.”

Mike Marshall, head of research at Amberdata, said the macro backdrop for crypto remained seemingly bearish for the long term based on traditional financial agitation. “The Treasury market’s recent weakness is flashing a recessionary signal, and Trump’s 90-day tariff pause isn’t as effective as markets assume, given that tariffs on China remain high and are even rising,” Marshall commented. Washington bumped import duties on Beijing goods to 145%, forcing China to respond with a 125% hike on Friday. Marshall expects this wrestling match to brood over cryptocurrencies, but Cahill presents an alternative outcome.

“In the long run, it sets the stage for a major capital rotation — out of fragile debt markets and into digital assets with real utility and programmable stability,” said Cahill.