Bitcoin Bounces Slightly After CPI Print Amid Fed Rate Cut Speculation
U.S. inflation data for June came in largely as expected, with headline CPI rising 0.3% and core inflation slightly below forecasts at 0.2%, sparking fresh speculation of a possible Federal Reserve rate cut later this year.
The headline Consumer Price Index (CPI), which tracks the overall cost of goods and services, matched economist predictions, rising 0.3% month-over-month and 2.7% year-over-year. This marked an uptick from May’s 0.1% monthly increase but showed inflation remains broadly stable.
Core CPI Offers Some Relief
More importantly for markets, core CPI — which strips out food and energy — came in softer than expected, up just 0.2% for the month compared to forecasts of 0.3%. On an annual basis, core inflation reached 2.9%, slightly below the projected 3.0%, indicating moderation in underlying inflation pressures.
This softer core reading could support arguments in favor of loosening monetary policy if disinflation continues into the second half of 2025.
Bitcoin Rebounds Modestly from Sharp Decline
In response to the data, Bitcoin (BTC) rose modestly to $117,300, after sliding from record highs near $124,000 in the previous 24 hours. While the bounce was limited, the price action reflects growing sensitivity in crypto markets to macroeconomic news, particularly inflation and interest rate expectations.
The initial decline in BTC ahead of the CPI release suggests traders were pricing in hotter inflation or a delay in policy easing. However, the milder core inflation print helped soothe market concerns, providing a small but notable boost.
Focus Turns to Federal Reserve’s Next Move
Though inflation is not entirely tamed, today’s figures add to growing speculation that the Federal Reserve may cut rates by September. Some Fed members have already indicated support for easing as early as the July policy meeting, though Fed Chair Jerome Powell has yet to signal any firm commitment.
For now, the Fed appears to be walking a fine line between inflation control and economic stability, and future decisions will likely hinge on upcoming labor market and inflation data.
Conclusion: Inflation Under Control, Markets Watch the Fed
June’s CPI numbers suggest inflation is rising at a manageable pace, especially in core categories. This could pave the way for the Fed to ease monetary policy later this year, especially if growth data shows further signs of softening.
Bitcoin’s reaction — while subdued — underscores its role as a macro-sensitive asset, increasingly driven by interest rate expectations and global liquidity conditions.