US inflation held steady in July, with the Consumer Price Index (CPI) showing a 0.2% monthly increase, down from June’s 0.3% rise, the Bureau of Labor Statistics reported Tuesday.
Over the past 12 months, prices climbed 2.7%, matching June’s annual pace.
Shelter costs rose 0.2% and were the largest contributor to the monthly gain. Food prices were unchanged overall, with a 0.3% rise in food away from home offset by a 0.1% drop in grocery prices. Energy prices fell 1.1%, driven by a 2.2% decline in gasoline.
Core CPI, which strips out food and energy, rose 0.3% on the month after a 0.2% increase in June. On an annual basis, core inflation came in at 3.1%, up from 2.9% the previous month. Gains were led by medical care, airline fares, recreation, household furnishings, and used vehicles, while lodging away from home and communication saw declines.
The data suggest price pressures remain sticky in core categories, even as energy costs ease. With the US effective tariff rate hovering at multi-decade highs, markets are now pricing in an 87% chance of a 0.25% Federal Reserve rate cut in September, up sharply from 57% a month ago.
Bitcoin’s Possible Reaction
Bitcoin could see renewed bullish momentum if the Fed cuts rates next month, as lower borrowing costs often boost liquidity and investor appetite for risk assets.
Persistent core inflation above 3% could reinforce Bitcoin’s appeal as a hedge, potentially driving a test of the $125K level before year-end.
Still, analysts warn that if inflation proves stubborn, the Fed may proceed more cautiously, which could trigger volatility across crypto markets. In that scenario, Bitcoin could face short-term pullbacks before resuming any sustained rally.
At the time of writing, BTC is trading around $118,500 after a 1.9% decline in the past 24 hours.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/us-cpi-rises-2-7-what-it-could-mean-for-bitcoins-next-move/