U.S. Inflation Aligns with Projections, Strengthening Fed's Stance on Rates

Bitcoin trades at $61,700 following the inflation report

The latest inflation figures from the U.S. align with market expectations, reinforcing the Federal Reserve's likely approach to maintaining interest rates. The Consumer Price Index (CPI) for May rose by 0.5% month-over-month and 4.2% year-over-year, matching economists' forecasts.

As a result, analysts predict the Fed will keep rates steady at 350-375 basis points during the upcoming meeting on June 17, with a potential hike of 25 basis points by the end of the year. The Core CPI, which excludes food and energy, increased by 2.9% year-over-year, slightly above April’s 2.8% but below the expected 3.0% for May.

In the wake of the announcement, Bitcoin was trading at approximately $61,700, showing minimal change over the previous 24 hours. U.S. stock index futures experienced a downturn, while the yield on 10-year Treasury bonds climbed to 4.5%. Additionally, WTI crude oil prices fell by 1% to $88.

Prior to the CPI release, market indicators suggested a 98% chance that the Fed would hold rates steady at the June meeting, according to the CME Fed Watch tool.