WEEX In-depth Analysis: July CPI Data Boosts Market Confidence, September Rate Cut Expectations Approach 90%!

Macro Economy: CPI Cooling Signals Policy Shift

The latest data from the U.S. Bureau of Labor Statistics (BLS) shows that in July 2025, CPI increased by 2.7% year-on-year and 0.2% month-on-month, both below market expectations (annual rate of 2.8%). Meanwhile, the core CPI annual rate rose to 3.1%, and the monthly rate was 0.3%, hitting a six-month high.

This combination of data indicates that overall inflation is moderate but the service sector remains resilient, suggesting a possible window for the Federal Reserve to ease policy. As shown in the figure below, the market quickly adjusted expectations, with the probability of a rate cut in September jumping to nearly 90%. Historically, whenever the expectation of a rate cut approaches this level, risk assets often experience a phased rebound.

Inflation Retreats, Market Risk Appetite Significantly Recovers

Over the past two years, the Federal Reserve's tightening policy has put continuous pressure on financial markets. In a high-interest-rate environment, capital costs have risen, liquidity has tightened, and high-volatility assets (such as cryptocurrencies and tech stocks) have been under significant pressure.

The recent CPI retreat not only means relief from price pressures but also signals a "policy turning point" psychologically for the market. With the expectation of a rate cut approaching 90%, the attractiveness of risk appetite assets has directly increased. Major U.S. stock indices rose across the board on the day the data was released, and the cryptocurrency market also responded quickly, with prices of mainstream coins generally rebounding.

Inflation Eases + Rate Cut Expectations Strengthen, Catalyzing Risk Appetite Recovery, Crypto Assets React Quickly:

• Bitcoin price climbed to about $119,000

• Ethereum broke through $4,600, approaching its all-time high of $4,800

  More structurally significant:

• DeFi and Layer 2 network activity increased;
• WEEX and other exchanges saw a simultaneous rise in spot and derivatives market trading volumes;
• ETF inflows stabilized, and institutional allocation willingness increased

• In the interest rate cycle, the Federal Reserve's rate cut expectations are often seen as a "starting signal" for risk assets. The continued slowdown in CPI means the Federal Reserve's tightening cycle may be coming to an end, which has a particularly amplifying effect on the liquidity-sensitive crypto market.

• Risk Appetite Rebounds: Institutional funds are beginning to refocus on high-volatility, high-growth crypto asset allocations.
• Dollar Index Weakens: Enhancing the pricing advantage of crypto assets globally, especially benefiting mainstream coins like BTC and ETH.

• WEEX Blog points out that historically, before each rate cut cycle begins, the crypto market often trends upward months in advance. The synchronous changes in this round of CPI data and rate cut probabilities may become an important macro catalyst for a new bull market.

  Comparing historical cases:

• 

  Showing that during the rate cut cycle, the crypto market can enter a high-return phase in the medium term

  WEEX Risk Reminder: Confidence is Recovering, but Rational Control of Pace is Still Needed

  Current market sentiment has entered the "greed" zone, with the Fear & Greed Index showing a rebound in greed, reflecting active capital inflows. On the WEEX exchange, BTC/USDT and ETH/USDT trading volumes have risen significantly, especially in Asian and Middle Eastern markets.

  However, the following risks still need attention:

• Inflation Rebound Risk: If subsequent CPI or PCE data rebounds, the Federal Reserve may delay rate cuts, which could dampen market sentiment.
• Leverage Risk: On-chain liquidation data indicates that high leverage still exists, and market corrections could be severe.
• Policy Regulatory Uncertainty: If future market regulations tighten, risk assets could be impacted.

  However, the market also needs to remain rational—historically, before each rate cut, financial markets have digested the benefits in advance, and short-term volatility is not uncommon. In addition, if subsequent inflation data fluctuates, the Federal Reserve's policy shift may be delayed. For investors, short-term chasing of gains requires controlling positions, while in the medium to long term, attention can be paid to high-quality assets with real application scenarios and ecological advantages, such as leading projects like ETH.

  WEEX Blog Viewpoint: Policy and Fundamentals Dual Drive is the Core Logic

  WEEX Blog analysis believes that this round of ETH's strong rise is the result of macro liquidity improvement expectations + Ethereum ecosystem fundamental benefits. Even if there is a short-term pullback risk, as long as the policy turning point is established and the on-chain ecosystem continues to thrive, ETH still has the opportunity to maintain relative strength.

  In terms of investment strategy, investors are advised to:

• Short-term: Pay attention to the rhythm changes in macro data such as CPI and PCE, and seize the band opportunities brought by policy signals.
• Medium to long-term: Focus on allocating high-quality projects with ecological barriers and user bases, avoiding blindly chasing short-term trends lacking fundamentals.

• In an environment where market rhythms switch rapidly, rational decision-making and strategy execution are particularly crucial. WEEX will continue to focus on macroeconomics and on-chain trends, using professional analysis and platform capabilities to help investors seize opportunities and protect assets amid volatility.