US Inflation Surprise: Bitcoin Breaks Fed Pressure, Climbing to $63,400

June inflation data in the US came in well below expectations, weakening the probability of a Fed interest rate hike and driving Bitcoin’s price up to the $63,400 level.

The highly anticipated Consumer Price Index (CPI) data for the United States has been released. The June data painted a much softer picture than market projections, significantly easing the interest rate hike pressure on the Federal Reserve (Fed). This development boosted risk appetite in global markets and triggered upward momentum in cryptocurrencies.

In June, the CPI recorded a 0.4 percent decline, despite expectations of a 0.1 percent drop. On an annual basis, inflation fell to 3.5 percent from 4.2 percent in May, coming in below the 3.8 percent expectation. Core inflation, which excludes food and energy items, remained unchanged on a monthly basis but showed a 2.6 percent annual increase, falling short of estimates.

Fed Interest Rate Hike Expectations Weaken

Following the announcement of the data, Bitcoin (BTC) price gained 2 percent in the last 24 hours, reaching the $63,400 level. Signals from Fed official Chris Waller, who previously suggested he could support a rate hike if core inflation did not decline, lost their relevance with these figures. According to CME FedWatch data, the probability of a July rate hike—which was just 8 percent a month ago—had climbed to 42 percent yesterday, but the new data quickly cooled those expectations.

Investors’ eyes are now fixed on the speech Fed Chairman Kevin Warsh will deliver to Congress. Warsh’s statements, providing insight into the general state of the economy, will dictate the market’s direction following the inflation data. The theme of inflation highlighted in the visual once again proved the decisive impact of macroeconomic data on crypto assets.