Core CPI Sneaks In Below Forecasts at 0.2%, and Bitcoin Sheepishly Climbs Back Over $61K 🐑

Bitcoin trimmed early losses on Wednesday after U.S. core inflation data came in softer than expected, with the price briefly recovering above $61,000 following the release. The Bureau of Labor Statistics reported that the Consumer Price Index rose 0.5% month-over-month in May and 4.2% year-over-year, both in line with economist forecasts. Core CPI, which excludes food and energy costs, rose 0.2% for the month against expectations of 0.3% and April's 0.4% reading, while the year-over-year core rate climbed 2.9%, in line with forecasts and above April's 2.8%.

The softer core print followed April's 3.8% year-over-year headline reading and came alongside expectations that the Federal Reserve will hold its policy rate at 350-375 basis points at the June 17 meeting. The CME Fed Watch tool had put the probability of an unchanged rate decision at 98% ahead of the data. Analysts have pointed to a 25-basis-point increase by year-end as a likely path, though no such move was signaled in Wednesday's report.

$BTC was trading around $61,400 after the release and $60,930.61 over the broader session, with the asset little changed over the prior 24 hours. U.S. stock index futures moved lower across major contracts, the 10-year Treasury yield rose to 4.5%, and WTI crude oil fell a further 1% on the day to $88. Derivatives markets and funding rates across major tokens had earlier pointed to rising bearish positioning, with some traders increasing short exposure into the inflation print.