US CPI steady; core cools, Bitcoin near $60,000

The US Consumer Price Index rose 0.5% in May, the Bureau of Labor Statistics reported Tuesday, leaving headline inflation at 4.2% year-on-year. Core CPI, which excludes food and energy, increased 0.2% for the month and 2.9% year-on-year.

Energy costs were the main contributor to the stronger headline print. Volatility in global oil markets and geopolitical tensions pushed fuel prices higher and added to the month’s inflation reading.

The softer monthly core reading indicates that price pressures outside of food and energy did not broadly accelerate in May. Shelter and many services categories remained elevated but did not show a fresh pickup for the month.

Market participants treated the data as a mixed signal for monetary policy. The lower-than-expected core monthly figure reduced the odds of immediate additional tightening, while the persistent headline rate left the possibility of sustained higher interest rates in place. Traders continued to price a prolonged higher-for-longer rate path.

Bitcoin traded around $60,000 during the session as crypto investors weighed relief from the cooler core reading against uncertainty from oil-driven headline pressure. Ongoing outflows from Bitcoin ETFs and volatile institutional flows limited strong buying interest and kept price moves uneven.

Stephen Wundke, strategy and revenue director at Algoz Technologies, described the CPI reading as easing immediate macro uncertainty and noted that pre-report sell-offs had left some crypto assets oversold, making a short-term relief bounce possible. John Briggs, head of US rates strategy at Natixis North America, cautioned that the outlook depends on oil prices remaining stable and not reigniting inflationary pressure.

Investors will monitor upcoming Federal Reserve communications, meeting minutes and labor market data for further policy guidance. For cryptocurrencies, liquidity conditions and institutional flows are likely to determine whether Bitcoin consolidates near current levels or resumes a directional move. Geopolitical developments that affect oil markets and any shifts in ETF flows are expected to be key market catalysts in the coming weeks.