The US inflation rate, as measured by the Consumer Price Index (CPI), dropped to 3.0% in June, according to the Bureau of Labor Statistics (BLS), lower than the 4.0% in May and expectations for 3.1%. On a monthly basis, the CPI rose 0.2% in June compared to 0.1% in May and forecasts for 0.3%. The core CPI, which excludes volatile food and energy costs, decreased to 4.8% from 5.3% previously and against forecasts for 5.0%; the monthly core CPI was 0.2% in June versus 0.4% in May and forecasts for 0.3%.
Today’s report shows headline inflation continuing to decline, with June’s 3% down from a peak of 9.1% in 2022, said the BLS. The core rate of inflation also began to decline to 4.8% from 5.3% after remaining above 5% this year.
Despite the good inflation news, the price of Bitcoin (BTC) remained in a holding pattern between $30,000 and $31,000. Traditional markets reacted to the news, with the US 10-year Treasury yield down 6 basis points to 3.91% and the 2-year yield off 14 basis points to 4.73%. The dollar index dropped 0.5% and stock index futures pointed to a nearly 1% gain at the open.
The CME’s FedWatch tool shows a 91.1% chance of the Federal Open Market Committee (FOMC) boosting rates at its July 25-26 meeting.