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USA Inflation: Today’s CPI Data

Filippo Iachello

December 20, 2024

4 min

The Consumer Price Index (CPI) Has Just Been Released: What It Means for the Markets

The Consumer Price Index (CPI), the key metric used to estimate inflation in the United States, has just been released. The fate of the markets often hinges on US inflation figures, and therefore on the CPI data published today. In this article, we’ll explore what the CPI is, why it matters, and examine the latest figures.

What Does CPI Mean?

Technically, the CPI (Consumer Price Index) is a fundamental economic indicator that measures the change in prices of goods and services typically purchased by consumers. In other words, it tells us how much more (or less) it costs to live today compared to the past.

The CPI is calculated by collecting price data on a representative “basket” of goods and services that consumers commonly buy. This basket includes a variety of essential products, such as food, clothing, housing, transportation, education, healthcare, and other everyday necessities. The US Bureau of Labour Statistics (BLS) collects prices monthly across 75 urban areas and compares them with previous periods.

Why Is It Important?

The CPI is used to measure inflation, which indicates the rate at which the cost of living is rising. If the CPI increases, it means that prices are rising, and, on average, people need to spend more to maintain their standard of living.

Bitcoin and the CPI: What’s the Link?

In recent weeks, Bitcoin’s price has returned to levels seen in December and January. This recovery is believed to be linked to improved clarity in the global economic outlook. Market volatility had been heightened by Donald Trump’s unpredictable tariff policies and the trade war with China. However, recent diplomatic engagement between the two superpowers has eased investor concerns. The primary problem is that tariffs could lead to price increases, thereby driving inflation higher.

Today’s CPI figure is especially significant because it could influence the Federal Reserve’s decision on interest rates during the upcoming FOMC meeting on 18 June. A lower CPI suggests reduced inflation, potentially prompting the Fed to cut rates. Lower interest rates typically encourage capital flows into riskier assets, such as equities and Bitcoin. Therefore, rather than a direct correlation, it’s more accurate to speak of an indirect link between Bitcoin and the CPI, as investors use CPI data to anticipate Fed policy moves.

The Last Time This Happened

Around two months ago, Bitcoin’s price plummeted in response to Trump’s tariff threats and the ensuing turmoil in traditional financial markets. Many investors fled to safer assets, increasing Bitcoin’s volatility. In such a context, the Consumer Price Index becomes a vital tool for understanding inflation trends and making informed decisions. A stable or declining CPI could signal a less uncertain economic environment, which in turn might reduce volatility in Bitcoin and other cryptocurrencies. Additionally, a recent US-China agreement to significantly reduce mutual tariffs has directly impacted market uncertainty.

June 2025 CPI Data Analysis

On 11 June 2025, the BLS released data for May 2025. According to the report, the monthly CPI fell by 0.1% compared to the previous month, while the annual CPI rose to 2.4%, up from 2.3% in May, but slightly below the expected 2.5%. Although not entirely positive—year-on-year inflation rose by 0.1%—the result still fell short of expectations. Naturally, the further the figure strays from the Fed’s 2% target, the less likely a rate cut becomes.

What Do These Figures Mean?

This is the first time in four months that the CPI has increased, which might be attributed to the impact of Trump’s tariffs on the US economy. However, the result defied expectations, as analysts had forecast a 0.1% higher rate in both monthly and annual comparisons. The key question now is what the Fed will decide at the FOMC meeting on 18 June. Analysts suggest that rates will likely remain unchanged to control inflation, which may continue on its upward trajectory.