CPI reports positive news, FOMC maintains interest rates, Bitcoin briefly approaches $70,000

Yesterday, the U.S. Bureau of Labor Statistics released CPI data unexpectedly showing a cooling trend, with overall CPI data remaining flat compared to April and rising 3.3% from the same period last year. Meanwhile, the Federal Reserve kept the key interest rate unchanged at 5.25% to 5.5%. While the Dow Jones saw a slight decline, the S&P 500 and Nasdaq both hit new highs in the stock market. Bitcoin also surged to nearly $70,000 at one point.

CPI Remains Unchanged from Last Month, Indicating Inflation Slows Down

The U.S. Bureau of Labor Statistics unexpectedly reported that the Consumer Price Index (CPI) for May remained unchanged from April, with a year-on-year increase of 3.3%, lower than economists' expectations of a 0.1% monthly increase and a 3.4% annual increase.

Following the release of the data, Bitcoin surged to nearly $70,000, while Ether reached a high of $3,659.

The Federal Reserve Maintains Interest Rates

The Federal Reserve concluded its latest Federal Open Market Committee (FOMC) meeting as expected, keeping the interest rates unchanged within the range of 5.25% to 5.5%. Chairman Powell stated that recent data, including the just-released CPI data, indicated a cooling of inflation pressures.

Earlier inflation data for the year was higher than expected, but recent monthly data has shown a decline. Long-term inflation expectations seem to be well anchored.

Although inflation has significantly dropped from its peak of 7% to 2.7%, Powell mentioned that this figure is still too high. The Fed remains committed to bringing the inflation rate back to the 2% target to support a strong economy that benefits everyone.

The updated dot plot projects only one rate cut of 0.25% this year, rather than the previously expected three cuts. Powell reiterated: The Fed is not confident in lowering rates at the moment and needs to see more positive data to strengthen our confidence in continuing towards the 2% inflation target.

However, according to the CME Group's FedWatch tool, while investors have slightly reduced their expectations for rate cuts this year, they still believe that the Fed may resume rate cuts in September and cut rates by another notch in December.

The U.S. stock market continued its optimistic trend after the CPI announcement, especially the tech-heavy Nasdaq, which surged 1.53% to hit another all-time high.