Bitcoin recovered some ground Wednesday after the May core consumer price index came in lower than expected, giving risk assets a lift. The core CPI — which strips out volatile food and energy prices — increased just 0.2% month-over-month, below the consensus forecast. Headline inflation rose 0.5%, matching expectations.
The data
The Bureau of Labor Statistics reported the May figures Wednesday morning. Core CPI rose 0.2% from April, a softer reading than economists had predicted. Headline inflation held steady at 0.5%, in line with market estimates. On an annual basis, core CPI moderated to 3.1% from 3.3% the prior month, while headline inflation eased to 3.8% from 4.0%.
Bitcoin’s reaction
Bitcoin had been trading lower ahead of the release but pared its losses sharply after the numbers hit. The price bounced off the day’s low and moved back toward the $68,000 level, according to trading data. The move was part of a broader uptick in risk assets — U.S. equity futures also turned positive as bond yields dipped.
Core inflation running below forecasts is generally a tailwind for speculative assets like crypto. It reduces pressure on the Federal Reserve to keep rates high, and that tends to funnel money into riskier bets. The response Wednesday was measured — no breakout, but a clear shift in sentiment. For now, traders are taking the data as a signal that the inflation scare earlier this spring might be fading.
The next major economic release — the May producer price index — is due Thursday. That will give another read on wholesale inflation before the Fed’s next policy meeting later this month.
