- Consumer Price Index rose to 2.4% in May, 0.1% higher than April’s CPI data.
- Bitcoin hovered near $109K post-CPI release, as traders showed calmness in market movements.
- The Federal Reserve is expected to keep interest rates steady while it monitors tariff impacts.
The annual U.S. Consumer Price Index rose to 2.4% in May, slightly higher than April’s 2.3%. Monthly inflation came in at 0.1% below the expected 0.2%. While core CPI, excluding food and energy, also rose by 0.1%, keeping its annual rate steady at 2.8% for the second month in a row.
This inflation reading led to notable shifts across financial markets. U.S. futures climbed, bond yields dropped, and the dollar weakened. The data clearly indicates that while price pressures persist, they are not accelerating rapidly, which could support the Federal Reserve’s current interest rate pause.
The Fed is expected to keep its benchmark rate between 4.25% and 4.50% during the June policy meeting. Although the PCE index remains its preferred measure, the CPI reading is strong enough to delay any rate cuts, at least through mid-2025. According to sources, Goldman Sachs economists are forecasting a 0.35% monthly rise in core CPI in the coming months due to tariff effects.
Tariff Impact Grows as U.S.–China Trade Deal Develops
The slow inflation climb is partly attributed to President Donald Trump’s tariffs, which have begun raising core goods prices. Categories like appliances, cars, and clothing are seeing price increases after months of decline, as retailers begin passing higher import costs onto consumers. Major retailers, such as Walmart, confirmed that price adjustments began in late May and June, indicating a delayed reaction to duties imposed months earlier.
Early Wednesday, the U.S. and China agreed on a framework to ease trade tensions, with President Trump calling the deal “done” pending final approval by Chinese President Xi Jinping. This truce may ease forward-looking concerns but may not reverse short-term inflation pressures already embedded in the economy.
Related: Bitcoin Inflation Falls to 0.27% as Price Eyes $115K
Bitcoin Steady as Ethereum, Altcoins Rally on ETF Inflows
Bitcoin traded at $109,628.32 following the CPI release, down 0.04% in 24 hours, according to CoinMarketCap. Trading volume reached $51.88 billion, with a market capitalization of $2.17 trillion, and 19.87 million BTC in circulation, representing 94.9% of the maximum supply of 21 million. In the meantime, Ethereum increased by 4 -5%, and Solana, XRP, and others by 4 -8%. More research indicates that Ethereum ETF inflows have totaled $450 million this month, suggesting a resilient altcoin sentiment amid macroeconomic volatility.
