U.S. June CPI Eases to 3.5%; Bitcoin Jumps Back Toward $65,000

U.S. inflation cooled more than markets expected in June, easing concerns that the Federal Reserve may need to tighten policy further. After the data hit, U.S. equity futures advanced, Treasury yields fell, the dollar weakened, and Bitcoin rebounded with other risk assets, returning to the mid-$64,000s. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index rose 3.5% year over year in June, down from 4.2% in May and below the 3.8% consensus forecast. On a monthly basis, CPI fell 0.4%, a bigger drop than the 0.1% expectation and the steepest monthly decline since April 2020. Core CPI, which excludes food and energy, increased 2.6% year over year, easing from 2.9% previously. It was unchanged month over month. Energy was the main driver of the cooling trend. Energy prices were still 15.7% higher than a year earlier, but that compares with a 23.5% annual increase in May. Gasoline inflation slowed to 26.7% year over year, and gasoline prices fell 9.7% in June from the prior month. Food and shelter continued to climb. Food prices rose 0.2% month over month and 3% year over year in June. Housing costs increased 0.1% month over month and remained one of the most persistent sources of price pressure. Bitcoin rallied nearly 5% intraday after the release, reaching about $64,830 before trading around $64,560. The token had slipped below $62,000 earlier amid renewed U.S.-Iran tensions. Markets broadly interpreted the softer CPI print as reducing near-term pressure for additional tightening, helping lift risk sentiment. Alongside Bitcoin's move, U.S. stock futures rose, Treasury yields declined, and the dollar weakened. The next CPI report is due on August 12. Investors will be watching the July data for signs that core inflation continues to cool. The June slowdown was driven largely by lower energy prices, and renewed Middle East tensions could keep pressure on oil and transportation costs in the period ahead.