U.S. inflation data for November, expected to show a 3.1% rise in the consumer price index (CPI), could influence Federal Reserve interest rate decisions and set the tone for financial markets.

Crypto traders have struggled to read the market over the past 24 hours, as bitcoin (BTC) swung wildly between $86,000 and $90,000, reflecting uncertainty ahead of the key economic release.

All eyes are on Thursday’s CPI report, which offers a fresh look at price pressures after the record government shutdown canceled October’s data, leaving the Fed without recent guidance. FactSet consensus estimates predict the headline CPI rose to 3.1% year-on-year in November, up from 3% in October, while core inflation, which excludes volatile food and energy prices, is also forecast at 3%.

This remains well above the Fed’s 2% target, potentially emboldening hawkish officials to downplay expectations of interest rate cuts. Markets are currently pricing in at least two 25-basis-point Fed cuts in 2026.

Expert view
“This release is highly anticipated, largely because the October report was canceled, leaving the Fed and markets partially in the dark,” said Dr. Mohamed A. El-Erian, President of Queens’ College, Cambridge University, and part-time Chief Economic Advisor at Allianz. He added that investors will be looking for signs that the disinflation trend in services is gaining momentum and whether tariff-driven price pressures in goods are fading.

Why Bitcoin might react
If the data confirm disinflation, markets could price in additional rate cuts next year, potentially boosting risk appetite, including for crypto. However, bitcoin has not shown a sustained bullish response to recent data, such as the jobs report on Tuesday, which showed the highest unemployment rate since September 2021.

Adding to the complexity, the 10-year U.S. Treasury yield has remained stubbornly above 4% despite expectations of Fed easing. Longer-term yields reflect investor bets on inflation trends, economic growth, and monetary policy. Higher yields make fixed-income instruments more attractive, weighing on risk assets like bitcoin. A hotter-than-expected CPI could push yields higher, challenging BTC bulls.

Crypto-specific headwinds
Market-specific factors are also creating pressure. MSCI is reviewing the eligibility of digital-asset treasury companies for its indices, potentially excluding firms with more than 50% crypto exposure. According to QCP Capital, such changes could trigger passive outflows of up to $2.8 billion, adding to an already fragile market environment.