Cooling Inflation Boosts Cryptocurrency Markets Amid Reduced Rate Hike Expectations

The US Bureau of Labor Statistics released inflation data for June, showing annual headline inflation dropped to 3.5% from 4.2% in May.

This decline was more significant than expected, with markets anticipating a drop to 3.8%, and the core component excluding food and fuel prices falling to 2.6% from 2.9%

The producer price inflation data for June also showed a decrease of -0.3%, compared to a downwardly revised 0.6% in May.

The softening of price pressures has led to reduced expectations for a rate hike by the Federal Reserve, with the CME FedWatch tool showing a likelihood of a rate hike in July at 12.3%, down from 16% previously and 31% a week ago.