CPI Inflation Cools to 3.4% in Line With Forecasts, Bitcoin Steady

U.S. consumer prices increased in line with expectations in July, with both headline and core inflation matching forecasts. Bitcoin remained around $64,000, while Treasury yields continued to move lower.

The inflation data did not provide a strong catalyst for markets to materially change their outlook for the Federal Reserve’s upcoming interest-rate decision.

Headline CPI rose 0.1% from June, matching economists’ estimates after falling 0.4% in the previous month. Compared with a year earlier, inflation climbed 3.4%, meeting expectations and edging down from June’s 3.5%.

Core CPI, which excludes volatile food and energy prices, advanced 0.2% month over month, matching forecasts as well as June’s increase. The annual core rate eased to 2.5% from 2.6% in June, also coming in as expected.

Bitcoin briefly slipped from about $64,400 to $64,080 immediately after the report before recovering. The cryptocurrency was little changed over the prior 24 hours, while Nasdaq 100 futures rose 0.7%.

Treasury yields stayed lower following declines ahead of the CPI release. The two-year yield fell 3.6 basis points to 4.19%, while the 10-year yield declined three basis points to 4.66%.

The inflation report was closely watched after a weaker-than-expected U.S. employment report showed the economy unexpectedly lost 23,000 jobs in July.

Expectations for a September Fed rate hike weakened after the CPI data. According to the CME FedWatch Tool, the probability of a rate increase fell to 44%, compared with 48% before the release and 54% one week earlier.