Bitcoin rose again towards the $65,000 level after lower-than-expected US inflation data led to a sharp drop in market expectations of a Fed rate hike at its July policy meeting.
summary
- Bitcoin rose towards $65,000 after US inflation in June came in below expectations.
- Cold CPI data sent the odds of a July Fed rate hike falling sharply across major markets.
- Investors now await Kevin Warsh’s testimony and PPI data as geopolitical risks persist.
According to According to the US Bureau of Labor Statistics, the Consumer Price Index (CPI) slowed to 3.5% year over year in June, lower than economists’ expectations of 3.8%. The monthly consumer price index fell by 0.4%, compared to expectations for a decline of 0.1%. The inflation report sparked a fresh move higher in risk assets, helping Bitcoin recover from losses linked to renewed geopolitical tensions.
Bitcoin (Bitcoin) rose about 5% to an intraday high of $64,830 on July 14 before retreating to about $64,560 at press time. The recovery came after falling below $62,000 during the previous session, when… Escalating conflict Relations between the United States and Iran affected market sentiment.
Core inflation data also came in below expectations. The Bureau of Labor Statistics reported core CPI rose 2.6% year over year and flat month over month, compared to expectations of 2.8% and 0.2%, respectively.
Latest numbers Improved from Maywhen the headline CPI reached 4.2% year-on-year, and the core CPI reached 2.9%, raising expectations that inflation pressures may ease despite the ongoing conflict in the Middle East.
Slowing inflation has lowered expectations for a rate hike in July
Interest rate expectations change quickly after the inflation release. According to CME FedWatch data, traders now assign only a 16.6% probability of a Fed rate hike at the Federal Open Market Committee meeting in July.
Prediction markets also revised their forecasts. Data From Polymarket showed the perceived probability of a rate hike in July to 9%, down from 34% previously. The platform also showed that the chance of interest rates being raised at least once during 2026 drops to 53%, compared to the recent peak of 71%.
The inflation report arrived just days after Fed Governor Chris Waller Shown It can support higher interest rates if inflation remains high. Against this backdrop, weaker-than-expected CPI numbers have dampened expectations that policymakers will tighten policy this month, providing support to Bitcoin and other risk-sensitive assets.
Attention has now turned to Federal Reserve Chairman Kevin Warsh, who is scheduled to testify before Congress over two days. Investors are also bracing for the Producer Price Index (PPI) report, which could impact future monetary policy expectations and lead to new volatility across cryptocurrency markets.
Geopolitical risks continue to limit the upside
Even as inflation declines, macro risks remain in focus. The recent weakness in Bitcoin came after renewed fighting between the United States and Iran, while President Donald Trump decided to do so Restoring the Iranian blockade It added pressure to global markets ahead of the CPI-led recovery.
Another source of uncertainty comes from Trump’s proposal to impose a 20% shipping fee on ships receiving US assistance while transiting the Strait of Hormuz. Market participants warned that any disruption to shipping through the waterway could tighten global oil supplies and complicate inflation expectations in the coming months.
As a result, weak inflation has improved the immediate outlook for cryptocurrencies by reducing interest rate hike expectations in July, but upcoming Federal Reserve comments, new inflation data and developments in the Middle East remain key factors that could determine whether Bitcoin is able to extend its recovery towards the $65,000 level.
