US Annual CPI Drops Below Expectations To 4%! Bitcoin Breaks Above $26.5K – NewsTo
US Annual CPI Drops Below Expectations To 4%! Bitcoin Breaks Above $26.5K

US Annual CPI Drops Below Expectations To 4%! Bitcoin Breaks Above $26.5K

In a surprising turn of events, the US Annual Consumer Price Index (CPI) has dropped below expectations to 4%, a development that has fuelled Bitcoin’s impressive surge above the $26.5K mark. The US Bureau of Labor Statistics (BLS) announced on Tuesday that the annual inflation rate, gauged by the Consumer Price Index (CPI), experienced a decrease in May, settling at 4% from the previous month’s 4.9%. This figure modestly undershot the market’s predicted rate of 4.1%.

US CPI Came In Softer Than Expected

The U.S. Consumer Price Index (CPI) for May has shown a more modest increase than anticipated, according to the latest data from the Bureau of Labor Statistics. The CPI, a key gauge of inflation, rose by a mere 0.1% in May, a significant slowdown from the 0.4% increase observed in April. This figure fell short of economists’ predictions, which had forecasted a rise of 0.2%.

When viewed on a year-over-year basis, the CPI exhibited a deceleration, slowing down to 4.0% in May as compared to 4.9% in April. This figure also slightly undercut the forecasted rate of 4.1%, indicating a softer inflationary pressure than initially expected.

The core CPI, which provides a more stable measure of inflation by excluding volatile items such as food and energy costs, aligned closely with expectations. It registered a rise of 0.4% in May, mirroring the increase seen in April and matching the forecasted rate.

However, on a year-over-year basis, the core CPI showed a slight slowdown. It stood at 5.3% in May, a slight dip from the 5.5% recorded in April, but still in line with the expected 5.3%.

Overall, the softer-than-expected rise in the CPI and the steady performance of the core CPI suggest a more nuanced picture of the U.S. economy. While inflationary pressures are present, they may not be as intense as previously feared, providing some relief to consumers and policymakers alike.

Bitcoin Price Shows Bullish Reaction

Following the positive CPI rate, Bitcoin price shows a solid surge, touching a high of $26,566 in the last few minutes. However, the price has now cooled down as it declined below the 23.6% Fib channel. As of now, BTC price is trading at $26.2K.

The recent update on inflation arrives just a day before the U.S. Federal Reserve is due to announce the outcomes of its monetary policy meeting. Before the release of today’s inflation figures, the market had factored in approximately a 76% probability that the Fed would halt its unprecedented series of rate increases that began in March 2022.

Following the release of the inflation data, the likelihood of a pause in rate hikes has seen a slight uptick, moving up to 79%.

In traditional markets, stock index futures are showing little movement, maintaining a modest increase for the session following the significant gains experienced on Monday.

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