Softer May Inflation Print Lifts Bitcoin as CPI Rises Just 0.1%

May CPI Undershoots Expectations, Paving Way for Fed Rate Cuts; Bitcoin Edges Up

U.S. inflation rose at a slower pace than forecast in May, bolstering investor optimism for Federal Reserve rate cuts later this year and giving Bitcoin a mild boost.

The Consumer Price Index (CPI) increased by just 0.1% on the month, below the expected 0.2% rise and matching April’s pace. On an annual basis, inflation came in at 2.4%, under the consensus 2.5% and slightly above April’s 2.3%.

Core CPI — which excludes food and energy — also climbed 0.1%, a notable miss compared to the 0.3% estimate. The annual core rate remained steady at 2.8%, just under the 2.9% forecast.

Bitcoin and Markets React

Bitcoin (BTC) responded to the softer data by rising to $109,800, up 0.6% in early trading, as cooling inflation supported broader risk-on sentiment across digital and traditional markets.

Market participants are holding firm to the view that the Federal Reserve will begin cutting interest rates in September, with a second cut anticipated in December, per CME FedWatch data.

Equity futures turned positive on the data, up 0.4%, while the 10-year Treasury yield slipped to 4.45%, down five basis points, as traders digested the prospect of a looser monetary environment.

The benign inflation print could add momentum to Bitcoin’s current consolidation phase above $109,000, especially as investors weigh macroeconomic signals and ETF flows.