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U.S. June CPI drops 0.4%, lowering July Fed hike odds

Core CPI was flat month over month, with the 2-year Treasury yield falling 7 basis points to 4.19% after the release.

Reported · Written up by our desk · Inflation

The U.S. June Consumer Price Index fell 0.4%, a much softer reading than economists expected, according to CoinDesk. The report showed core CPI, which excludes food and energy, was flat versus expectations for a 0.2% increase.

On a year-over-year basis, CPI rose 3.5% versus forecasts for 3.8%, while core CPI increased 2.6% compared with expectations for 2.8%. CoinDesk said the downside surprise likely reinforces the view that a Federal Reserve rate hike in July is less likely.

CoinDesk also linked the data to shifting expectations for policy, noting July rate hike probabilities had been pushed up sharply before the release, then cooled after the CPI print. The outlet said investors were also watching remarks from Fed Chairman Kevin Warsh scheduled to begin testimony to Congress later.

After the inflation release, CoinDesk reported that bitcoin extended earlier gains, rising to $63,400, while U.S. stock index futures moved higher. Bond yields fell, with the U.S. 2-year Treasury down seven basis points to 4.19% and the 10-year down five basis points to 4.56%.

Latest closeBitcoin $64,752.03 ▲4.0%

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