#FedRateCutAffectsDollarTrend Yes, CPI (Consumer Price Index) news directly affects the Federal Reserve’s decision on rate cuts because it is a key indicator of inflation. Here’s how CPI influences Fed policy: 1. Higher CPI (High Inflation) → Delayed or No Rate Cut • If CPI is higher than expected, it signals that inflation is still strong. • The Fed may delay rate cuts or even raise rates to control inflation. • A higher CPI reduces the chances of a Fed rate cut, which can strengthen the U.S. dollar (USD). 2. Lower CPI (Low Inflation) → Higher Chances of Rate Cut • If CPI is lower than expected, it indicates that inflation is cooling down. • The Fed is more likely to cut rates to support economic growth. • A rate cut weakens the USD, as lower interest rates make the currency less attractive to investors. 3. CPI vs. Fed’s 2% Inflation Target • The Fed aims for a 2% inflation target. • If CPI remains above 2%, the Fed may hold rates steady or hike them. • If CPI drops close to or below 2%, the Fed is more likely to consider rate cuts. 4. Market Expectations & Volatility • CPI releases create high volatility in Forex and stock markets.