US Inflation Cools to 3.5% as Bitcoin Recovers

The U.S. Bureau of Labor Statistics reported that the Consumer Price Index fell significantly from May’s 4.2% rate, marking its first retreat in five months. Falling energy costs served as the primary catalyst, as gasoline prices dropped 9.7% during the month. While energy prices remain 15.7% higher than a year ago, this represents a notable improvement from the 23.5% surge recorded in May, aided by a temporary easing of U.S.-Iran tensions during the period.

Core inflation, which strips out volatile food and energy sectors, also signaled progress by easing to 2.6% annually. This figure, down from 2.9%, suggests that cooling price pressures are broadening beyond the energy sector, even as shelter costs continue to climb. Bitcoin responded to the data with a 5% gain, hitting an intraday high of $64,830. This recovery reversed a recent slide below $62,000, as investors moved to price in a less aggressive monetary policy stance from the Federal Reserve.

Despite the positive June data, market participants remain cautious regarding the July outlook. Renewed geopolitical friction in the Middle East has reignited concerns over oil supply stability, threatening to reverse the recent cooling in energy costs. With the next inflation report scheduled for August 12, the sustainability of this downward trend remains tethered to both core economic metrics and the volatile energy landscape.