In July, the Consumer Price Index (CPI) experienced a 0.2% increase compared to June, aligning with economists’ predictions and mirroring the monthly growth observed in June. On a year-over-year basis, the CPI rose by 3.2%, slightly below the projected 3.3% and similar to the 3.0% figure from June.
The Core CPI, which excludes volatile food and energy expenses, also exhibited a 0.2% rise in July, consistent with both forecasts and the increase recorded in June. Looking at the year-on-year perspective, Core CPI in July grew by 4.7% compared to the previous year, slightly below the predicted 4.8%, and in line with the 4.8% seen in June.
Following the release of the U.S. government’s report, the price of Bitcoin (BTC) remained relatively stable at $29,550.
These figures could influence the likelihood of the Federal Reserve raising interest rates during its upcoming meeting in September. Before the release of the CPI data on Thursday, the CME FedWatch tool indicated that traders had factored in a mere 15.5% probability of a rate hike in the following month. However, immediately after the report’s publication, these odds decreased to 10%.
Over the past 17 months, the Federal Reserve has implemented tighter monetary policies to address escalating inflation. This led to an increase of over 500 basis points in its benchmark fed funds rate target, placing it within the current range of 5.25% to 5.50%.
The surge in interest rates played a role in the decline of Bitcoin’s value from over $69,000 in late 2021 to just above $16,000 by the end of 2022. Ongoing concerns about interest rates this year have likely contributed to limiting Bitcoin’s rebound., If it confirms the expectation that the Federal Reserve might ease off on rate hikes, the latest CPI report could positively impact Bitcoin’s outlook.
