NewsletterUS CPI Data Comes In At 2.4%; What Does It Mean for the Crypto Market?
Highlights
- The US CPI for May was released today, coming at 2.4% after a 0.1% surge from April data.
- Analysts forecasted a 2.5% YoY CPI increase and a crypto market crash if the data exceeded expectations.
- As the CPI data came below 2.5%, a Bitcoin price rally to $110k could form in an optimistic case.
The U.S. Bureau of Labor Statistics has released the CPI data today, June 11, at 8:30 AM ET. As the netizens and investors braced for the May Consumer Price Index release, the market was on the edge, fueling uncertainty and volatility. Although investors’ sentiments were in greed amid anticipation of bullish results, the performance of digital assets is divided between bulls and bears. Now, the data came at 2.4% below the expectation, and investors are awaiting a crypto market rally.
US CPI Data Comes to 2.4%, Crypto Market Fails to React
Experts’ analysis forecasted the US CPI to rise 0.2% MoM and 2.5% YoY, up 2.3% from the April data. In addition to this, Core inflation was expected to rise 0.3% MoM and 2.9% YoY under the impact of President Donald Trump’s tariff implementations.
However, the data came even lower than the expectation at 2.4% YoY, up 0.1% from the April data. Moreover, the Core inflation came at 2.8% YoY, up 0.1% MoM, maintaining a moderating effect. Interestingly, this could signal the Fed to cut interest rates in the longer run, if not immediately.
For now, the Fed is expected to keep the interest rate steady as it seeks more reports, and even the US CPI report shows cooling inflation.
“May should bring the leading edge of price increases, with the maximum impact coming in June and July,” said Stephen Stanley, chief U.S. economist at Santander.
The crypto market has not shown any immediate effect with this result, but better results are anticipated amid the hopes of potential rate cuts and upcoming macroeconomic events.
Crypto Market Rally Odds Form, Claims Experts
The US CPI Data expectation was at 2.5%, opening three possibilities for the digital asset’s reaction. Crypto analysts like Ash Crypto predicted that the crypto market could crash if the data came higher than expectations. Data above the target would become the highest MoM increase in 2025, hence high volatility.
The second case, where the data comes exactly as expected, could also bring a correction. However, this would not last long, as a reversal would follow. The last possibility is the data below expectation, which almost every investor desires, and even came true.
Experts believe lower data would pump the crypto and stock markets. Considering this possibility, the Bitcoin price flourished today, currently trading at $109.6k, closer to its ATH mark. With the greed building among investors amid US CPI data, the crypto market could rally next.
However, uncertainty still persists amid various macroeconomic trends, so investors should trade with caution.
Frequently Asked Questions (FAQs)
1. What is the significance of US CPI data?
2. What the analysts expected for the May 2025 CPI data?
3. Will the crypto market rally?
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