The U.S. Consumer Price Index was flat in May. This beat economists’ expectations of a 0.1% increase and is down from 0.3% rise in April.

CPI rose 3.3% on an annual basis, which was higher than analyst expectations and the reading of 3.4% for the previous month.

Core CPI increased 3.4% year-over-year against the expected 3.5% and April’s 3.6%.

BTC Price Index and Live Chart – CoinDesk”>(BTC) welcomed the soft inflation read, jumping to $69,400, up nearly 4% over the past 24 hours.

The Federal Reserve raised interest rates in 2022 and ’23, causing inflation to rapidly fall. However, this trend has stalled over the month, with levels stubbornly above the 2% policymakers’ target.

The CME FedWatch Tool revealed that traders had expected five or six 25 basis point (bps) cuts by the end December of this year. This number was reduced to one or even two after today’s CPI release, with the first reduction not occurring until September.

In a report published earlier this week, K33 research stated that crypto prices are “highly sensitivity” to U.S. Economic data. Recent hotter inflation numbers and the resulting decreased hopes for rate reductions fueled bitcoin’s fall from its all-time high price of $73,000 in march to below $57,000 this May. The traders believe that the next leg of the crypto rally will be fueled by looser monetary policies.

In contrast to U.S. expectations several major central banks have already begun to lower benchmark interest rates. The European Central Bank (ECB) and Bank of Canada cut rates last week. This helped propel the U.S. Dollar Index (DXY), to an all-time high.

Investors will also be watching closely the Fed’s “dot plot” of Federal Market Open Committee member’s interest rate projections, which is due to be released today. This could affect asset prices.

Kevin Reynolds and Stephen Alpher edited the book.