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US June CPI print data released Thursday delivered a jolt to global markets, showing inflation rose to 2.7% year-over-year, above expectations and sending ripples through Bitcoin and altcoins.
The fresh inflation reading has complicated the Federal Reserve’s monetary policy path ahead of its critical July 30 FOMC meeting.
US June CPI print figures were closely watched after traders priced in a potential uptick, but the actual rise from May’s 2.4% to 2.7% has forced a swift recalibration across risk assets.
Bitcoin (BTC), which had already slipped below $117,000 earlier in the day, saw a mild post-data rebound before stabilizing.
The US June CPI print beat expectations for the first time in five months. Analysts had forecast a 0.3% MoM rise and a 2.6% YoY gain. Instead, headline inflation ticked even higher.
“ABOVE expectations for the first time in 5 months,” noted analyst Quinten in a post on X, formerly Twitter.
Bitcoin dropped from a session high of $123,000 in the days leading to the release but hovered near $117,138 post-print.
Altcoins also reflected this muted but calculated response, with traders appearing to have priced in the higher inflation scenario.
Attention now turns sharply to the Federal Reserve. According to the CME FedWatch Tool, the odds of the Fed holding rates steady surged to 97.4% following the US June CPI print. That’s up from 95.3% just a day prior.
“In just 2 months, CPI inflation in the US has risen from 2.3% to 2.7%,” observed macro outlet The Kobeissi Letter. “Critics will blame tariffs, and praisers will blame base effects. Regardless, the Fed will not cut interest rates this month.”
The next FOMC decision, due July 30, now hinges on how policymakers interpret both this US June CPI print and upcoming labor and spending data.
Analysts say the hotter inflation may be due to external economic shocks. Tensions in the Middle East, particularly between Iran and Israel, have driven oil prices higher.
Iran’s movement to restrict shipping through the Strait of Hormuz is seen as a contributing factor.
“It is expected to be higher than last month due to an increase in OIL price,” wrote Daan Crypto Trades. “The recent comment by Bessent seems like foreshadowing… DXY appears to be moving a bit.”
Others point directly to the Trump-era tariffs, which are now being passed onto consumers. Businesses that had previously absorbed costs or stockpiled goods are running out of buffers.
“You’re still in an environment where businesses used a broad array of strategies to mitigate the effect of duties,” Bloomberg quoted EY-Parthenon Chief Economist Gregory Daco as saying. “They can do so no longer, with consumers now bearing the brunt.”
Minutes from the Fed’s June policy meeting already highlighted division within the central bank over the direction of inflation. The US June CPI print will further intensify that debate.
“Inflation turning higher over the summer was expected,” Fed Chair Jerome Powell said at a July 1 conference. “Tariffs and supply chain issues are complicating the picture, and we must remain cautious.”
Private-sector forecasters had similarly projected a rebound in CPI due to shifting global trade patterns and surging commodities. The US June CPI print confirms that outlook—though some see it as a temporary base effect.
While the US June CPI print has not triggered panic, it has prompted renewed caution. Risk assets, including crypto, equities, and bonds, are recalibrating.
“Notwithstanding, the next CPI print is always the most important after the last one,” BeInCrypto reported. “And today’s inflation reading is no different.”
Bitcoin’s resilience in the face of rising inflation may be a sign that investors believe the Fed will maintain a steady hand. Still, rate cuts are off the table—at least for July.
With just weeks until the next FOMC meeting, every inflation signal counts. And the US June CPI print has made it clear: the road to the Fed’s 2% inflation target remains bumpy.
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