U.S. Inflation Rises to 4.2% as Bitcoin, Ether Rebound

The U.S. Bureau of Labor Statistics reported the Consumer Price Index rose 4.2% in May from a year earlier, the fastest annual pace since May 2023. On a monthly basis the CPI increased 0.5%, driven largely by higher energy costs.

Officials and analysts attributed the monthly gain to rising fuel prices after renewed tensions between the U.S. and Iran put pressure on oil supplies.

Cryptocurrency markets showed limited volatility after the report. Bitcoin recovered from earlier losses, rising from about $61,000 to roughly $61,750 within 15 minutes and later trading near $62,000, about a 0.3% gain for the day. Ethereum rose to around $1,650. XRP and Solana moved to about $1.12 and $65; XRP remained roughly 1.6% below its previous-day level.

The CPI reading affects the Federal Reserve’s policy outlook. Traders using CME FedWatch now price in at least one interest-rate increase before year-end. The Fed has kept its benchmark federal funds rate at a 3.5% to 3.75% range this year.

Iggy Ioppe, chief investment officer at trading infrastructure platform Theo, commented that ‘For Bitcoin, an in-line print is unlikely to be a clean catalyst. It keeps liquidity expectations capped and risk assets trading more on positioning than on a fresh dovish impulse.’

Fold Holdings, a Phoenix-based fintech, said it sold roughly $45 million of Bitcoin at an average price near $71,000 per coin, eliminated its secured debt and freed about $25 million in capital. Fold’s shares rose more than 160% after the announcement.

The May CPI report will be watched for signs of whether energy-driven price pressures moderate in coming months or persist.