US Inflation Turns Negative in June, BTC Above $59K

According to the Consumer Price Index (CPI) report published by the US government, inflation continued to decline in June, with the rate announced at negative 0.1%, against estimates of a 0.1% increase and a reading of 0.0% in May.

On an annual basis, CPI came in 3.0% higher than expectations of 3.1% and 3.3% in May.

Core CPI, which excludes food and energy costs, also came in better than expected, coming in at just 0.1%, as in May, despite expectations of 0.2%. Annual Core CPI rose by 3.3%, despite forecasts of 3.4%.

The Bitcoin (BTC) price jumped to $59,100 in the minutes following the report, up nearly 2 percent in the last 24 hours.

Looking at traditional markets, U.S. stock index futures were higher, with the 10-year Treasury yield falling nine basis points to 4.20%. Gold rose 1% to $2,404 an ounce.

Market participants are increasingly bullish on the idea that the U.S. Federal Reserve will finally cut its benchmark federal funds rate at its mid-September meeting. The CME FedWatch tool now puts the probability of that happening above 70%, up from 50% just a month ago.

Fed Chairman Jerome Powell emphasized in a press conference earlier in the week that the labor market was weakening and that the Fed was increasingly focused on downside risks to the economy. However, he reiterated that the central bank’s inflation target for rate cuts was 2%.