Inflation Data Offers Relief to Risk Assets
The May U.S. Consumer Price Index (CPI) report was released to much anticipation, and it brought a dovish surprise. The headline CPI rose just 0.1% month-over-month, lower than the expected 0.2%, while Core CPI—which excludes food and energy—also increased only 0.1%, below the forecast of 0.3%.
Year-over-year, headline CPI came in at 2.4%, and core CPI at 2.8%—both in line or slightly below expectations.
This signals moderating inflation pressures, giving the U.S. Federal Reserve room to consider rate cuts later this year, especially as inflation cools toward the Fed’s 2% target.
Market Reaction: Positive but Cautious
Prior to the data release, global markets were tense. However, the softer CPI figures have been interpreted as a bullish signal for risk assets, including Bitcoin, Ethereum, and U.S. equities.
Bitcoin is currently trading at $109,225, holding steady on the day. Ethereum is at $2,766.83, while Solana gained 2.2% to reach $164.22.
The total crypto market cap stands at $3.56 trillion, down 1.4% in the last 24 hours.
While these numbers show muted intraday reaction, analysts expect short-term volatility as traders digest the implications of the report.
Analyst Views: Inflation Easing, Rate Cuts on Table
Analysts at multiple research firms note that the May CPI report may alleviate fears of a renewed inflation spike, especially as the impact of recent tariffs is expected to be absorbed by companies rather than passed on to consumers.
“For the bearish narrative to regain traction, a new catalyst is needed,” said one analyst group.
Another report projects Bitcoin could find support near $106,000 if inflation surprises to the upside, but if inflation stays soft, Bitcoin may test resistance at $110,350.
Outlook: Event-Driven Movements Ahead
With inflation trends softening, attention now turns to the Federal Reserve’s next policy move. While no rate cut is expected in the near term, dovish inflation data may increase pressure on the Fed to act in the coming months.
Until a stronger inflation print or new macroeconomic catalyst emerges, crypto markets may remain in a consolidation phase.