tl;dr
Bitcoin rose about 0.5% following a May Consumer Price Index (CPI) increase of 2.4%, which was lower than expected and indicates limited impact from U.S. President Trump's trade war. Bitcoin's price climbed closer to $110,000, gaining 4.4% over the past week amid hopes for eased tariff tensions and ...
Bitcoin and major altcoins rallied following a lower-than-expected May Consumer Price Index (CPI) report, sparking hopes for Federal Reserve rate cuts and easing trade war tensions. Bitcoin rose about 0.5% after the CPI increase came in at 2.4%, below forecasts and suggesting limited impact from U.S. President Trump’s trade policies. The leading cryptocurrency edged closer to $110,000, marking a 4.4% gain over the past week amid optimism around tariff resolutions and corporate adoption of Bitcoin.
Altcoins such as Ethereum and Solana mirrored Bitcoin's positive momentum, with Ethereum climbing 1% and Solana 1.7% in the last hour, following weekly gains of roughly 7%. Solana traded near $167.09 according to recent data. Experts attribute the rally to broader macroeconomic demand and growing regulatory clarity for decentralized finance (DeFi), suggesting that momentum could persist independently of Federal Reserve actions.
The subdued inflation data increases the likelihood of a future Fed rate cut, which is typically bullish for digital assets. Inflation climbed only 0.1% month-over-month, pushing the annual rate to 2.4%, slightly above the Fed’s 2% target but still below economists’ expectations. Core inflation, excluding volatile food and energy prices, also rose just 0.1%, leading to an annual rate of 2.8%. This trend follows similarly cool inflation prints earlier this year, supporting market bets on eventual rate reductions.
Federal Reserve officials have emphasized that any rate cuts will depend on clear evidence of sustainable inflation decline. Currently, the Fed funds rate sits between 4.25% and 4.50%, unchanged for the last three meetings despite President Trump's calls for cuts. Market tools estimate a near-certain possibility of steady rates at the July meeting, with over a 50% chance of a cut in September.
Market participants remain cautiously optimistic. Analysts note that Bitcoin is poised near record highs but warn that volatility could spike if upcoming U.S. inflation data surprises on the upside. Investors are watching closely, as stronger inflation numbers might unsettle risk assets including cryptocurrencies. Overall, the subdued CPI report fuels optimism for digital asset rallies amidst a complex economic backdrop.