US CPI Inflation Rises to 2.4%, What’s Next for Bitcoin Price?

Key Insights:

• The CPI inflation rose to 2.4% in the U.S. comes but came below a forecast of 2.5%, increasing for the first time after three months.
• The CPI increased slowly month-over-month despite Trump tariffs fueled positive sentiment in the crypto and equities markets.
• Bitcoin and Ethereum prices jumped after the CPI reading because the CME FedWatch showed two rate cuts this year.

The headline consumer price index (CPI) inflation in the U.S. comes in at 2.4% below forecasts of 2.5%, increasing for the first time after three months. Bitcoin price and Ether saw a slight upward move as traders evaluated the impact of Trump tariffs.

Moreover, the market anticipated the Federal Reserve (Fed) to cut interest rates soon this year, adopting monetary policy changes as suggested by President Donald Trump.

At the time of writing, the CME FedWatch showed a 99.9% probability of the Fed keeping interest rates unchanged in the June meeting. However, the odds of two rate cuts in September and December, respectively.

US CPI Inflation Increases in May

The U.S. Bureau of Labor Statistics released the latest data on CPI inflation for May. As per the report, the headline CPI inflation increased to 2.4% from 2.3% in April, below a 2.5% forecast but rose after decreasing for three consecutive months. Moreover, the annual core CPI comes in at 2.8%, below the forecast of 2.9%.

The month-over-month CPI inflation rate increased 0.1%, below forecasts and a 0.2% rise last month. Moreover, the core CPI monthly increased only 0.1% against the expectations of 0.3% due to a seasonally adjusted basis from a 0.2% increase in the previous month.

Notably, most Wall Street giants estimated the headline CPI inflation to rise less than expected at 2.4%. There are JPMorgan, Bank of America, Wells Fargo, Citigroup, Barclays, and UBS.

On the other hand, Goldman Sachs, Morgan Stanley, and HSBC estimated the inflation reading to come in line at 2.5%, as per an X post by global market analyst Jesse Cohen.

Bitcoin Price, equities Trend to Stay Resilient: 10x Research

10x Research was expecting a flat or modestly higher CPI inflation print. However, analysts didn’t expect major moves in Bitcoin and equities despite inflation coming in above expectations. The primary reason — the Trump tariffs appeared less impactful than initially feared, companies are worried to passing on the costs.

“Pre-tariff stockpiling (“hamster hoarding”) hasn’t driven prices up, and inventories remain ample, limiting inflationary pressure. The rebound in equities has lifted consumer confidence. Looking ahead, even weaker data is likely to reignite discussions about stimulus,” as per 10x Research.

On the contrary, the U.S. economy has shown signs of gradual weakening, as evidenced in ISM manufacturing and non-manufacturing indices. Analysts also asserted that the US labor market has not softened enough, with mixed recent data.

As per 10x Research, fears of a collapsing U.S. consumer sentiment are likely overstated. It added that “rather than hard data being driven by soft sentiment, sentiment may have been unduly influenced by negative media coverage.”

Will Bitcoin Price, Ethereum Rally?

Bitcoin price continued to move range-bound near $109K, after a pullback from above $110K levels earlier this week. The 24-hour low and high were $108,367 and $110,380, respectively. Furthermore, the trading volume decreased by 12% in the last 24 hours, indicating a decline in interest among traders.

However, whales continued to buy Bitcoin as reported by on-chain data platform Lookonchain. It revealed that James Wynn took a 40x long position on Bitcoin and a 10x long position on Pepe Coin. Other whales and institutional investors also continued accumulating Bitcoin worth millions daily.

Contrarily, traders are more bullish on Ethereum than Bitcoin. Coinalyze reported in an X post that Ethereum has overtaken Bitcoin in trading volume on the futures market.

ETH price jumped over 1% in the past 24 hours, with the price changing hands at $2,798 at the time of writing. The 24-hour low and high were $2,697 and $2,832, respectively.