The June Consumer Price Index came in cooler than almost anyone on Wall Street expected, with headline inflation actually falling 0.4% month-over-month. Economists had forecast a modest 0.1% decline. In English: prices didn’t just slow down, they reversed course in a way that caught the consensus off guard.
Bitcoin responded the way risk assets tend to when the inflation boogeyman takes a day off. The largest cryptocurrency climbed roughly 2% during the session to approximately $63,400, as traders repriced the odds of a near-term Federal Reserve rate hike.
The numbers tell a clear story, for now
On a year-over-year basis, headline CPI eased to 3.5%, down from 4.2% in May and below the 3.8% forecast.
The core CPI reading, which strips out volatile food and energy prices, was even more striking. It came in completely flat on a monthly basis, versus expectations for a 0.2% increase. Year-over-year, core inflation registered 2.6%, undershooting the 2.8% consensus and cooling from May’s 2.9% reading.
