🔥 CPI Data Just Dropped — Here’s What It Means for Markets, the Fed, and Crypto
May’s U.S. inflation print came in cooler than expected, with CPI rising just 0.1%, below forecasts of 0.2%. Core inflation (excluding food and energy) also slowed to 0.1% for the month and 2.8% year-over-year, giving bulls across markets a brief moment to breathe.
🚗 What Cooled Prices Down?
Gasoline: -2.6% in May
Used Cars: -0.5%
Apparel: -0.4%
Shelter and Food: Still rising at +0.3%, but cooling
📉 Real Wages rose 0.3%, while annual wage gains (inflation-adjusted) hit 1.4% — giving consumers some power back, even if temporarily.
🏦 Fed Still Unmoved — June Rate Cut Odds = 0%
Even with tame CPI data, the Fed remains cautious. Markets have completely priced out a June cut. Attention now shifts to September, with a ~57% chance of a 25 bps rate reduction.
President Trump reacted fast, posting on Truth Social:
> “CPI JUST OUT. GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT.”
But the Fed isn’t flinching — especially with summer tariff risks looming. Trump’s “Liberation Day” tariffs (10% on all imports) could still fuel a new wave of price hikes if global supply chains get squeezed.
💥 What This Means for Crypto
Lower Inflation = Bullish Bias for BTC & ETH
Delayed Rate Cuts = Stronger Dollar = Short-Term Volatility
Tariff Uncertainty = Macro Risk On/Off Switch
If inflation stays muted and the Fed eventually pivots, risk-on assets like Bitcoin could rally. But if tariffs ignite a new inflation spike, volatility could explode in both TradFi and DeFi.
📌 TL;DR:
Inflation cooled in May. Fed's still in wait-and-see mode. Rate cuts likely delayed till September. Eyes on tariffs and trade chaos. Crypto traders — stay sharp.