Bitcoin Falls Below $63K as July Fed Rate Hike Expectations Rise Ahead of US Inflation Data

Bitcoin and the broader crypto market moved lower on Tuesday as investors increased expectations that the US Federal Reserve could raise interest rates in July. The decline comes ahead of the release of the June Consumer Price Index (CPI) report and congressional testimony from Federal Reserve Chair Kevin Warsh, two events expected to shape market sentiment in the coming days.

Bitcoin and Altcoins Decline as Rate Hike Bets Increase

Bitcoin fell more than 1.8% over the past 24 hours, trading around $62,660. Major cryptocurrencies, including Ether and XRP, also recorded similar losses as traders shifted toward a more cautious outlook.

According to Bloomberg data, money markets now see about a 50% chance of a July Federal Reserve rate hike, a sharp increase from roughly 10% just a few days earlier. The change in expectations followed comments from Federal Reserve Governor Christopher Waller, who suggested policymakers may need to raise interest rates further to keep inflation under control.

The shift also pushed the two-year US Treasury yield to 4.29%, its highest level since early last year, reflecting growing expectations of tighter monetary policy.

Oil Prices and Inflation Concerns Weigh on Markets

Rising geopolitical tensions have added to inflation worries. President Donald Trump reinstated a US blockade of Iranian vessels passing through the Strait of Hormuz and introduced a 20% reimbursement fee on other cargo ships using the strategic waterway.

As a result, WTI crude oil climbed nearly 9%, reaching around $78 per barrel after starting the month near $67.

Markets Await CPI Report and Kevin Warsh’s Testimony

Investors are now focused on the June Consumer Price Index report, scheduled for release by the US Labor Department. Economists expect headline inflation to fall below 4% year over year, while both headline and core inflation are forecast to record their first monthly declines since January after May’s readings of 4.2% and 2.9%, respectively.

Analysts at ING believe Warsh could highlight stable inflation expectations and may decide to keep rates unchanged despite growing pressure for another hike. They also noted that if a rate increase does occur, markets still expect future rate cuts to outweigh additional tightening over the longer term.