U.S. inflation data for July matched expectations across both headline and core measures, while bitcoin remained near $64,000 and Treasury yields continued to ease.
The latest CPI report offered little surprise, keeping market expectations for a possible Federal Reserve rate hike broadly stable.
Headline CPI increased 0.1% from the previous month in July, meeting the 0.1% forecast and rebounding from a 0.4% decline recorded in June.
Compared with a year earlier, consumer prices rose 3.4%, matching economists’ projections but slowing from June’s 3.5% annual increase.
Core CPI, which excludes volatile food and energy prices, climbed 0.2% month over month, matching both forecasts and June’s reading. On an annual basis, core inflation reached 2.5%, in line with expectations and slightly below June’s 2.6%.
Bitcoin initially dipped from about $64,400 to $64,080 following the release before recovering and remaining broadly unchanged over the past 24 hours. Nasdaq 100 futures gained 0.7%.
Treasury yields extended their declines from before the CPI release. The two-year Treasury yield stood at 4.19%, down 3.6 basis points, while the 10-year yield fell about three basis points to 4.66%.
The July CPI report was particularly important for markets after the latest employment data pointed to unexpected weakness in the U.S. labor market, with the economy losing 23,000 jobs in July.
According to the CME FedWatch Tool, traders now assign a 44% probability to a Fed rate hike in September, down from 48% before the inflation figures were released. One week earlier, markets had priced in a 54% chance of a September hike.
