Key Moments:

• US Consumer Price Index increased just 0.1% in May, lower than the 0.2% forecast.
• Markets predict that the Fed will not introduce interest rate cuts during its next meeting.
• Although Bitcoin’s price attempted an uptick soon after the data’s publication, it subsequently suffered another drop and reached $109,384.

Inflation Decelerates More Than Expected, Bitcoin Suffers Volatility

New inflation data released by the US Bureau of Labor Statistics revealed a modest 0.1% rise in the Consumer Price Index (CPI) for May. This softer-than-anticipated increase came in below economists’ forecasts of 0.2% and matched April’s 0.2% figure. On an annual basis, the CPI was up 2.4%, slightly under the 2.5% prediction and marginally higher than April’s 2.3% reading, signaling a slower upward trend in consumer prices.

The core CPI, which excludes the often-volatile food and energy components, also rose by just 0.1% in May. Meanwhile, the year-over-year core CPI figure held steady at 2.8%.

For now, CME FedWatch Tool data has shown that traders continue to price in expectations for looser monetary policy from the Federal even as the pace of inflation remains uncertain. No rate cuts are expected in the Fed’s next meeting. Instead, easing should start in September and December, according to the present consensus.

The figures initially triggered heightened interest in risk assets such as cryptocurrencies, with Bitcoin in particular trimming major losses suffered earlier today and nearing $110,000. However, the momentum was short-lived.

Bitcoin Fails to Rebound While Traditional Markets Recover

The Wednesday session saw Bitcoin’s price plummet to $109,384. At press time, the token continues to fluctuate near the $110,000 mark.

Certain altcoins moved in tandem with Bitcoin, with Ether, for example, falling sharply by 0.81% to $2,793.8. Wednesday also saw the total cryptocurrency market cap stand at $3.58 trillion, reflecting a 1.9% decline over the past 24 hours.

In contrast to Bitcoin, US equity futures successfully reversed previous losses and achieved gains after today’s trading commenced. The S&P 500 jumped 0.1% shortly after the opening bell and managed to reach 6,044.91. The Dow Jones Industrial Average advanced even further and reached 42,933.74. As for the tech sector, the Nasdaq Composite also climbed 0.15% to 19,741.68.