US CPI Inflation Data Shows Prices Rose 0.1% MoM in May, Bitcoin Reacted Positively

The US Bureau of Labor Statistics (BLS) released the Consumer Price Index (CPI), showing that inflation rose at an annual rate of 2.4% in May

The US Bureau of Labor Statistics (BLS) announced on Wednesday, June 10, that the Consumer Price Index (CPI) rose at an annual rate of 2.4% in May, after 2.3% Year-on-Year (YoY) in April. This marks the first increase in the headline CPI inflation in 3-4 months.

According to the BLS data, the CPI for all urban consumers rose by 0.1% in May, following no change in April. Economists polled by Dow Jones had anticipated a 0.2% rise in the CPI and a 0.3% increase in the core CPI.

The BLS also revealed that the CPI increased by 2.4% over the past 12 months, aligning with economists’ predictions.

After the report, pre-market trading in New York switched to greed, with crypto stock indices flashing green.

Several banks expected the May CPI to show mild headline inflation and monthly core inflation close to the median reading from the previous 12 months.

Moreover, it seems that Trump’s tariffs had an impact on the CPI inflation data. As the administration implemented price increases on several products, the year-over-year inflation in May could be attributed to tariffs.

“Expectations are for a slight increase compared to last month which is likely due to the increase in OIL and some of the tariffs that are getting pushed through to consumers,” wrote analyst Daan Crypto Trades.

This week, traders and investors will keep an eye on several US economic indicators. Among them are the jobless claims and PPI, set to be released on Thursday, June 12.

The Federal Reserve will also be a primary focus next week as it will release the interest rate decision for the June 17/18 meeting on Wednesday, followed by Chairman Jerome Powell’s speech.

According to the CME FedWatchTool, there is a 99.9% chance the Fed will keep interest rates steady at 4.25-4.50% in the next meeting. For now, this means a nearly 0% chance of Fed interest rate cuts.

“Odds of the Fed cutting rates next week are down to 0%,” The Kobeissi Letter noted.

However, despite the perceived impact of Trump’s tariffs on US inflation, Powell’s stance is that political pressure will not influence the Fed’s policy decision.

With inflation still above the Fed’s 2% target, policymakers may continue to take a cautious approach.

“The market generally expects the Federal Reserve to continue to take a wait-and-see approach…market movements will still be event-driven, with the key factors being adjustments to interest rate cut expectations following the Federal Reserve meeting and officials’ statements,” Bitunix analysts told BeInCrypto.

The labor market is also becoming a fundamental macroeconomic catalyst for Bitcoin. The Fed may only need a resilient labor market and an economy that has not derailed so far to cut interest rates.

“On the face of it, these numbers should ease some of the inflationary worries, with both headline and core inflation coming in lower than expected…The challenge is that while inflation isn’s not rising as fast as expected, it isn’t falling either, and a lot of today’s undershoot is down to falls in global energy prices. If that didn’t make for a murky enough picture, the Trump administration’s tendency to chop and change on tariffs only makes things worse…All in all the outlook remains murky, despite the superficially perky numbers,” Nicholas Hyett, Investment Manager at Wealth Club, said in an email to BeInCrypto.