CPI Says 4.2%, Wall Street Shrugs, Bitcoin Shuffles Back to $62K

U.S. consumer prices climbed 4.2% year-over-year in May, matching Wall Street estimates and marking the fastest annual pace in three years, according to Consumer Price Index data released Wednesday by the Bureau of Labor Statistics. The headline figure rose from 3.8% in April, with monthly CPI increasing 0.5% after a 0.6% gain the prior month. Bitcoin ($BTC) dipped below $61,000 ahead of the release before recovering, trading at $61,783 at the time of writing and later changing hands near $62,000, roughly 0.3% higher over 24 hours per CoinGecko, though still down 1.32% over the same window. Ethereum ($ETH), XRP, and Solana ($SOL) also ticked higher to $1,650, $1.12, and $65, respectively, resuming a rebound from Friday's selloff.

Energy drove the bulk of the increase, with the energy index rising 3.9% in May and accounting for more than 60% of the overall CPI climb. Gasoline prices rose 7.0% on the month and are now up 40.5% over the past 12 months, averaging $4.15 per gallon according to AAA, compared with $2.98 when the U.S. and Israel first struck Iran on February 28. Core CPI, which strips out food and energy, rose 0.2% monthly and 2.9% annually, below the 0.3% monthly reading economists had forecast. Shelter inflation rose 0.3% on the month and 3.4% over the year, while real wages fell 0.1%, a second straight monthly decline.

President Donald Trump embraced the data when asked by reporters, saying "The numbers were great…I love the inflation" and predicting oil would "come down like a rock" once the war ends. His comments come one week before the Federal Reserve's June policy meeting under new Chair Kevin Warsh, whose predecessor Jerome Powell resisted repeated Trump pressure to lower borrowing costs. The central bank has held its benchmark interest rate steady at a target range of 3.5% to 3.75% throughout 2026, and CME FedWatch shows a 98.4% probability the Fed holds again next week, while markets now price more than 70% odds of a rate hike by year-end.

Market reaction to the in-line print was muted rather than euphoric. "For Bitcoin, an in-line print is unlikely to be a clean catalyst," Iggy Ioppe, chief investment officer at trading infrastructure platform Theo, told Decrypt. "It keeps liquidity expectations capped and risk assets trading more on positioning than on a fresh dovish impulse." Separately, Nasdaq-listed Fold Holdings announced Wednesday it had eliminated all of its secured debt and freed up $25 million in fresh capital by selling roughly $45 million worth of Bitcoin at an average price of about $71,000 per coin, sending its share price more than doubling after the opening bell.