Bitcoin Surges as Cooler Inflation Revives Rate Cut Hopes

Bitcoin Soars as Cooling Inflation Revives Interest Rate Cut Hopes

Bitcoin and other cryptocurrencies rebounded on Wednesday after U.S. inflation data came in slightly below expectations, raising hopes that the Federal Reserve could start cutting interest rates later this year.

The world’s largest cryptocurrency rose over 4% to over $69,500 within minutes of the inflation report being released.

The Ministry of Labor reported that the annual inflation rate decreased from 3.4% in April to 3.3% in May.

While still elevated, lower-than-expected indicators could allow the Fed to eventually ease its aggressive interest rate hike measures.

Crypto prices rose on inflation data, with Bitcoin rising above $1,900 in a matter of minutes. Ether and other altcoins also gained as investors reassessed the macroeconomic situation.

Still, Wednesday’s report may not be enough to convince Fed Chairman Jerome Powell and his colleagues to start cutting rates immediately. Inflation remains at 3.3 percent, well above the historically acceptable target of 2 percent.

The Fed is scheduled to wrap up its final policy meeting on Wednesday.

Also Read: Interest Rate Hikes and the Fed – How Will It Affect Crypto Markets?