The June CPI report significantly lowered expectations for a rate hike, with odds falling from 43% to just 13%. Market participants are now turning their attention to the September FOMC meeting for clearer direction.
Bitcoin climbed to around $64,800 on Wednesday, posting its strongest session in weeks after U.S. inflation came in cooler than forecast. The softer data prompted traders to scale back expectations of a Federal Reserve rate increase this month.
Headline inflation eased to 3.5% from 4.2%, while core inflation—excluding food and energy—slipped to 2.6% from 2.9%. The moderation in core prices indicates broader inflationary pressures are easing, weakening the case for additional tightening.
Following the release, rate hike expectations dropped sharply, and the two-year Treasury yield declined by six basis points.
Bitcoin rose 3.6% over the past day and is up 3.3% for the week, with roughly $31 billion in trading volume. Ether led gains, climbing to nearly $1,880, up 5.3% on the day and 7.1% over the past seven days. Other major tokens also advanced: HYPE gained 6.4% to $67, XRP rose 3.7% to $1.10, Solana added 3.6% to $78, Dogecoin increased 2.9%, and BNB edged up 1.9% to $579.
Rising interest rates typically pressure bitcoin and other risk assets, as higher yields on cash and government bonds make safer investments more attractive compared to volatile, non-yielding assets like crypto.
On the flip side, easing inflation reduces the urgency for further rate hikes, weakening that headwind and allowing capital to rotate back into riskier assets.
In commodities, Brent crude rose 1% to above $85 per barrel, marking a third straight day of gains. Oil has surged 11% over the past two sessions after renewed geopolitical tensions, including U.S. threats of further strikes on Iran and a resumed blockade of Iranian shipping in the Strait of Hormuz.
Equity markets followed suit. MSCI’s Asia Pacific index jumped 2.3%, its biggest gain in a month, driven by technology stocks. South Korea’s Kospi surged 8.2%, reclaiming its position as the top-performing major index this year, while SK Hynix rose 13% in Seoul after its U.S.-listed shares rallied 27%.
Jeff Ko, chief analyst at CoinEx, said bitcoin continues to behave like a rate-sensitive risk asset rather than a macro hedge. He noted the latest inflation data helps ease near-term downside risks but does not yet point to a sustained breakout.
With core inflation still above the Federal Reserve’s 2% target, the data gives policymakers room to pause rather than cut rates. Ko highlighted the September FOMC meeting as the next key macro event, alongside movements in the U.S. dollar and the sustainability of bitcoin ETF inflows.
