Softer Core Inflation Data Helps Bitcoin Trim Earlier Declines

Headline inflation rose 0.5% in May, in line with expectations, while a softer-than-anticipated core reading—excluding food and energy—helped support market sentiment.

The U.S. inflation report broadly matched forecasts, reinforcing expectations that the Federal Reserve will keep its policy rate in the 350–375 bps range at its June 17 meeting, with markets still pricing in a possible 25 bps hike by year-end.

Data from the Bureau of Labor Statistics showed the Consumer Price Index increased 4.2% year-over-year in May, exactly matching economist projections and rising from 3.8% in April.

On a monthly basis, CPI climbed 0.5%, meeting expectations and easing slightly from April’s 0.6% gain. Core CPI, which excludes food and energy, rose just 0.2%, below forecasts of 0.3% and down from 0.4% previously. Year-over-year core inflation came in at 2.9%, in line with estimates and up marginally from 2.8% in April.

Bitcoin (BTC) ticked higher following the release but remained broadly subdued, trading just above $61,000 and little changed on the day.

Broader financial markets were weaker, with U.S. stock futures falling across the board. The 10-year Treasury yield rose toward 4.5%, while WTI crude oil extended its decline, slipping another 1% to around $88 per barrel.

Ahead of the data, markets had already priced in a 98% probability that the Federal Reserve would leave rates unchanged at its June meeting, according to the CME FedWatch Tool.