Economists had predicted significant year-over-year declines in both headline and core inflation for this particular report. According to the Bureau of Labor Statistics (BLS), the U.S. inflation rate, as measured by the Consumer Price Index (CPI), decreased to 3.0% on a year-over-year basis in June, down from 4.0% in May. This was slightly lower than the expected dip to 3.1%. On a monthly basis, the CPI rose by 0.2% in June compared to 0.1% in May, falling short of the anticipated 0.3% increase.
The core CPI, which excludes volatile food and energy costs, dropped to 4.8% from the previous 5.3% and fell below the forecasted 5.0%. The monthly core CPI for June was 0.2%, down from 0.4% in May and lower than the projected 0.3%.
Following the release of the report, the price of bitcoin experienced a slight increase to $30,900, but later retraced its gains, settling just below $30,800. Despite headline inflation continuing to decline, with June's rate at 3% compared to the peak of 9.1% in 2022, policymakers at the Federal Reserve are likely more concerned with the core inflation rate, which finally showed a decrease from 5.3% to 4.8%. This is the slowest pace since October 2021.
However, both the markets and the Federal Reserve are still anticipating another interest rate hike when the Federal Open Market Committee (FOMC) convenes later this month. According to the CME's FedWatch tool, there is a 91.1% probability of the FOMC raising rates during its July 25-26 meeting.
While the news of favorable inflation numbers has had little impact on bitcoin, traditional markets have reacted, with the U.S. 10-year Treasury yield declining by 6 basis points to 3.91% and the 2-year yield decreasing by 14 basis points to 4.73%. The dollar index has slipped by 0.5%, and stock index futures indicate a nearly 1% gain at the market open.
No comments:
Post a Comment