Fed hike odds double to 50% ahead of CPI, Bitcoin dips to $62,380
Macro & Markets ·
Traders repriced the chance of a July Federal Reserve rate increase sharply higher, pulling Bitcoin and other major tokens lower just before a closely watched inflation report.
Money markets now put the probability of a July hike at roughly 50%, a jump from about 10% only days earlier, following comments from Fed Governor Christopher Waller that policymakers might need to tighten further if core inflation remains sticky. Bitcoin fell more than 2%, changing hands near $62,380, according to coindesk.com. The two-year U.S. Treasury yield, a maturity especially sensitive to near-term policy shifts, climbed to 4.29%.
The move reflects how quickly rate expectations can ripple into risk assets: a doubling of hike odds in a matter of days was enough to trigger a broad pullback across cryptocurrencies, even before the actual inflation print was released. Higher short-term yields tend to raise the opportunity cost of holding non-yielding assets like Bitcoin, which helps explain the synchronized reaction in both bond and crypto markets.
The hawkish repricing did not occur in isolation. It coincided with escalating U.S.-Iran tensions and a run-up in oil prices, factors that add to inflation worries independent of the upcoming data. Markets were bracing for the release of the June consumer-price index alongside congressional testimony from the Fed chair, seen as the next catalysts for clarifying whether the central bank follows through on a hike or holds steady.
That data ultimately arrived softer than feared: June CPI fell 0.4% month-over-month, described as the largest monthly decline since 2020, while core inflation held around 2.6%, based on figures cited by theblock.co. Bitcoin rebounded on the news, rallying toward $64,000, with decrypt.co and cryptopotato.com both noting the price move followed the inflation slowdown, though other accounts put the intraday peak closer to $63,500 and cautioned that core CPI remained flat.
What remains unresolved is whether the softer CPI print will be enough to offset the geopolitical and oil-driven pressures that fueled the hike bets in the first place, and how the Fed chair's testimony will shape expectations heading into the actual policy decision. Whether the initial 50% hike probability recedes, or whether renewed volatility from Treasury yields resurfaces, is likely to remain a key driver for Bitcoin in the near term.