The July U.S. CPI inflation data has come in line with expectations, further easing concerns of a Fed rate hike this year. Bitcoin has rebounded today amid the release of the inflation data, climbing above the psychological $64,000 level.
U.S. CPI Inflation Falls to 3.4%, Bitcoin Rebounds
U.S. Bureau of Labor Statistics data shows that the consumer price index fell to 3.4% year-over-year (YoY) in July, in line with expectations. The index also fell to 0.1% month-over-month (MoM), in line with expectations.
Meanwhile, core CPI fell to 2.5% YoY and 0.2% MoM, both in line with expectations. Bitcoin has rebounded amid the release of the inflation data, which has further eased concerns that the Fed will hike rates this year.
The leading crypto is currently trading at around $64,100, up from an intraday low of around $63,400, according to TradingView data. Bitcoin, however, continues to trade in a tight range amid uncertainty around the U.S.-Iran war and the Strait of Hormuz and their impact on energy prices.
As CoinGape reported yesterday, Fed President Austan Goolsbee called inflation the economy’s biggest challenge right now, signaling that he may support rate hikes. Fed President Neel Kashkari, an FOMC voting member, called for rate hikes to combat inflation.
Odds Of A Rate Hike Fall
The odds of a Fed rate hike at the September FOMC meeting have further fallen following the release of the CPI inflation data, representing a positive for Bitcoin and the broader crypto market. Prediction market data shows a 67% chance that rates will remain unchanged following the meeting.
Data from the top crypto prediction market platform Polymarket also shows that the odds of a rate hike this year have fallen to 54%, down from a recent high of 60%. The odds of a hike had climbed to as high as 79% in July as the U.S.-Iran war escalated again.
Attention will now turn to tomorrow’s PPI inflation release, which would further provide insights into the current state of inflation in the country. A soft PPI inflation print could further ease fears of a hike, especially with the July jobs report signaling that the labor market remains unstable.
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