Home / Business and Economy / US Inflation Cools Sharply, Fed Rate Hike Odds Plummet
US Inflation Cools Sharply, Fed Rate Hike Odds Plummet
17 Jul
Summary
- US producer prices declined 0.3% in June, the first drop since August 2025.
- Bitcoin surged past $65,000 and Ethereum topped $1,900 on the news.
- Market expectations shifted, with an 87.7% chance the Fed will hold rates.
US producer price inflation experienced a notable downturn in June, marking its first monthly decrease since August 2025 with a 0.3% fall. This figure follows closely behind consumer inflation data that also missed forecasts, collectively signaling a disinflationary trend.
Headline PPI eased to 5.5% year-over-year, below the 6.2% consensus, while core PPI fell to 4.7% against expectations of 5.2%. The sharp 0.3% monthly decline was largely driven by a 12% drop in gasoline prices, which significantly impacted final demand goods.
This softened inflation data has dramatically shifted market sentiment regarding Federal Reserve policy. CME FedWatch data now indicates an 87.7% probability that the Fed will maintain current interest rates at their July 29 meeting, a stark contrast to the 31% chance of a hike observed just a week prior.
In response to the news, cryptocurrencies saw a significant rally. Bitcoin (BTC) reclaimed the $65,000 level, trading near $65,256, while Ethereum (ETH) climbed above $1,900, reaching $1,930. This surge led to the liquidation of nearly $100 million in short positions within 30 minutes.
