Bitcoin Up After June CPI Drop; Americans See Rents Jump 8.3%

Bitcoin climbed to about $64,700 after U.S. consumer prices fell in June. The consumer price index fell 0.4% from May, the largest monthly decline since 2020, and the 12-month inflation rate eased to 3.5%. Core CPI, which excludes food and energy, remained at 2.6% for the year. The monthly decline in headline CPI reflected lower energy costs tied to a temporary ceasefire that pushed oil and fuel prices down in June.

Retail sales in June rose 0.2% on a nominal basis. Sales at gasoline stations recorded the largest monthly drop since December 2022. Retail sales are reported in current dollars and do not adjust for changes in prices. Excluding auto dealers and gasoline, retail sales increased about 0.4%. The Census Bureau’s control group measure, which feeds into GDP calculations, rose 0.5%, with gains led by online shopping and car dealers.

Import prices rose 0.3% in June, a slowdown from a 1.9% increase in May. Export prices fell 0.6% after six straight months of gains. Nonfuel imports edged up 0.1%, with small increases in capital goods, industrial supplies and consumer goods. Over the past 12 months, import prices are up 6.7% and export prices are up 11.2%. The Bureau of Labor Statistics measure of import prices does not include tariffs and customs duties.

Federal Reserve industrial production data for June showed manufacturing output stalled. Durable goods production declined, led by machinery and electrical equipment, while nondurable goods posted a modest gain. Total industrial production rose because utilities increased output for summer demand. Capacity utilization in manufacturing was 75.7%, below the long-run average.

The New York Fed’s monthly survey of consumer expectations found households plan to increase spending about 5% over the next year while expecting earnings to rise roughly 3%. One-year-ahead inflation expectations rose to 3.7%, the highest level since 2023. Respondents expect unavoidable costs to climb, with medical expenses projected to rise 9.4% and rent projected to rise 8.3% over the coming year.

Markets reacted after the inflation release. Government bond yields eased following the softer headline CPI print. Bitcoin rose as traders reassessed the likely path of Federal Reserve policy. The Fed’s target federal funds rate is 3.50% to 3.75%. Nine of 18 Fed officials project at least one more rate increase this year. Market-implied odds of a September hike fell to roughly 50–63% from about 75% the day before the June inflation release.

Energy prices shifted after the ceasefire ended in early July. Oil rose more than 15% after the truce collapsed on July 7–8. July inflation, retail and import reports may reflect higher fuel costs.