The Labor Department on Tuesday released US Consumer Price Index (CPI) data for May 2023, where the CPI reading for all urban consumers rose 0.1%, seasonally adjusted and rose 4% over the past 12 months. Inflation data for the month was as expected, while the annual inflation rate of 4% was the lowest in about two years.
The market had expected the CPI data to show signs of easing inflation, with prices expected to rise 0.1%, compared to a 0.4% rise in April 2023. At the same time, market players also expected interest rate hikes to be on hold for the time being.
The release of CPI index data that measures the average change over time in the cost paid by urban consumers for goods and services has pushed Bitcoin prices up 3% from a daily low of $25,700 to trade at $26,095
Meanwhile, news of easing inflation and the lowest annual inflation rate recorded in two years could mean additional confidence for US Federal Reserve officials in deciding to initiate a pause in rate hikes. The CME FedWatch tool, which measures the likelihood that the Fed will change the Fed's target rate, currently shows a 100% probability of a rate hike pause in the next meeting.
