The U.S. Consumer Price Index (CPI) for May came in softer than expected, with a rise of just 0.1% compared to the 0.4% increase in April, according to the Bureau of Labor Statistics. This was lower than the economists’ forecast of 0.2%. On a year-over-year basis, the CPI slowed to 4.0% in May, down from 4.9% in April and the expected 4.1%. The core CPI, which excludes volatile items such as food and energy costs, was in line with expectations, increasing 0.4% in May, the same as in April and the forecast of 0.4%. Year-over-year, the core CPI slowed to 5.3%, down from 5.5% in April and the expected 5.3%. The price of Bitcoin (BTC) rose just under 1% to $26,375 in the minutes following the report, noted the article.
The news on inflation comes one day ahead of the results of the U.S. Federal Reserve’s monetary policy meeting. Prior to this morning’s numbers, market participants had priced in about a 76% chance the Fed will pause its rate hikes, which have been ongoing since March 2022. After the news, the chance of a pause has risen to 79%. In traditional markets, stock index futures remain modestly higher for the session after Monday’s gains, while the 10-year Treasury yield has dipped three basis points to 3.71%, and the two-year yield is off six basis points to 4.51%.