U.S. November CPI data just released, with an unadjusted annual rate of 2.7%, significantly lower than the market expectation of 3.1%, a difference of 0.4 percentage points. This number is quite interesting.

The concerns about inflation exceeding expectations have temporarily eased. What does this mean? The expectation of rate cuts has been revived. Previously, the market was somewhat hesitant about the Federal Reserve continuing to cut rates in December, but this data essentially sends a clear signal — there is still room.

For the crypto market, this is a positive sign. A rate cut cycle usually indicates ample liquidity, lower funding costs, and risk assets (including cryptocurrencies) tend to benefit. Especially when the Federal Reserve's policy outlook shifts from hawkish to dovish, overall risk appetite tends to increase.

But don’t celebrate too early. Although inflation is below expectations, the 2.7% annual rate is still somewhat above the Fed’s 2% target. Continued attention to monthly data changes is necessary to determine whether rate cuts will persist. In the short term, this data indeed provides a bit of breathing room for a rebound in crypto assets.