The expected release of US inflation data on Wednesday reinforced expectations that the US Federal Reserve (Fed) will likely keep interest rates unchanged at 350-375 bps at its June 17 meeting, but will likely raise rates by 25 bps by the end of the year.
According to a report from the Bureau of Labor Statistics, the consumer price index rose 4.2% in May compared to the same month last year. Economists had expected a 4.2% rise, following a 3.8% rise in April.
Month-on-month, the CPI rose 0.2%, contrary to expectations for a 0.5% rise and a 0.6% rise in April. Core CPI, which excludes food and energy costs, rose 0.2% in May, compared with expectations of 0.3% and 0.4% in April. Year-on-year core CPI rose 2.9% compared to the expected 2.9% and 2.8% in April.
Although Bitcoin saw some gains after the data was released, it remains under pressure. Following the report, Bitcoin was trading just above $61,000, with little change in the past 24 hours. US stock index futures fell across the board, and the 10-year US Treasury yield rose to 4.5%. WTI crude oil continued to fall, dropping another 1% on the day to $88.
Ahead of the CPI data, markets had priced in a 98% chance that the Fed would leave interest rates unchanged at its June meeting, according to the CME Fed Watch tool.
