The Consumer Price Index (CPI), a key measure of price changes across various goods and services, rose by 3.0% over the 12 months ending in June, according to the Bureau of Labor Statistics. This increase came in slightly below economists’ expectations of a 3.1% rise. On a month-to-month basis, inflation decreased by 0.1% in June, marking the first monthly decline since May 2020, following a flat reading in May.
This slowdown in inflation marks the fourth consecutive month of deceleration, signaling progress in the Federal Reserve’s efforts to control rising prices. Investors have eagerly awaited this development, hoping it could lead to potential rate cuts in the near future.
Earlier this week, Federal Reserve Chairman Jerome Powell expressed satisfaction with the inflation slowdown but emphasized the need for more evidence of a sustained downward trend towards the Fed’s 2% target before considering rate cuts.
CME traders had predicted a 65% chance of an initial Fed rate cut in September. However, some analysts, including Valentin Fournier of BRN, urge caution, suggesting that hawkish comments from the Fed could temper market enthusiasm following the inflation report. Fournier pointed to the strong Personal Consumption Expenditures (PCE) report on June 28 as an example, where the market reacted as if inflation was not decreasing.
Bitcoin (BTC) rebounded from its recent four-month low, briefly climbing past $59,000 following the release of the CPI figures. However, Bitcoin failed to maintain this level, falling back to $56,600, down 0.8% over the past 24 hours.
Related Topics:
