Bitcoin Recovers Slightly as Inflation Data Sparks Fed Rate Cut Hopes
Bitcoin rebounded modestly to $117,300 after tumbling from record highs above $124,000 just over a day ago, following the release of U.S. inflation data that largely aligned with expectations and fueled speculation about a potential Federal Reserve rate cut later this year.
In June, the headline Consumer Price Index (CPI) rose 0.3%, matching forecasts and accelerating from 0.1% in May. Year-over-year, CPI climbed 2.7%, in line with predictions and higher than May’s 2.4%.
Core CPI, which excludes food and energy prices, increased 0.2% in June, slightly softer than the expected 0.3%, and higher than May’s 0.1%. On an annual basis, core inflation came in at 2.9%, just below the anticipated 3.0% and up from 2.8% the previous month.
Traditional markets reacted positively to the data. Futures tied to the S&P 500 advanced 0.4%, while the yield on the 10-year Treasury slipped two basis points to 4.41%.
Investors are closely watching inflation trends to determine when the Fed might lower rates. While a few Fed officials have hinted at a possible cut as early as the late July meeting, broader consensus—including Fed Chair Jerome Powell—suggests caution.
For now, the Fed’s September meeting remains the leading candidate for potential easing. Before today’s CPI release, CME’s FedWatch Tool placed the odds of a September rate cut just below 62%.
