Bitcoin Edges Higher as U.S. Inflation Data Lands Mostly in Line with Forecasts

Bitcoin, which had been sliding sharply from record highs near $124,000 reached just over 24 hours ago, saw a modest recovery to $117,300 in the minutes following the latest U.S. inflation report.

U.S. inflation ticked higher in June, largely matching expectations and potentially paving the way for the Federal Reserve to consider an interest rate cut as early as September.

The headline Consumer Price Index (CPI) increased 0.3% in June, aligning with economists’ forecasts and accelerating from 0.1% in May. On an annual basis, CPI rose 2.7%, matching expectations and higher than May’s 2.4%.

Core CPI — which excludes volatile food and energy prices — climbed 0.2% in June, slightly cooler than the anticipated 0.3% gain, and higher than the 0.1% increase seen in May. Year-over-year, core inflation was up 2.9%, just below the expected 3.0% and a touch higher than May’s 2.8%.

Alongside the rebound in bitcoin, traditional markets also responded positively. U.S. stock index futures extended gains, with the S&P 500 futures up 0.4%, while the yield on the 10-year Treasury slipped two basis points to 4.41%.

Investors continue to monitor inflation closely to gauge the likelihood of Federal Reserve rate cuts later this year. While at least two Fed officials have floated the idea of easing policy as early as the central bank’s late July meeting, broader consensus—including Fed Chair Jerome Powell—has leaned toward caution.

This leaves the Fed’s September meeting as the more likely window for potential rate cuts. Ahead of this morning’s CPI data, futures markets pegged the probability of a September move just under 62%, according to CME’s FedWatch Tool.