We have new data on inflation in the US. In June, prices grew at a slower pace. This is important information for the Fed, which may start cutting interest rates in September.
US inflation is falling
In June 2024, consumer price inflation (CPI) in the US was 3%, the government’s Bureau of Labor Statistics (BLS) reported. The market consensus assumed a result slightly higher – 3.1%.
What does this mean? As you may recall, US CPI inflation was rising again for the first three months of 2024. In April, there was another positive break in the trend. Disinflation continued in May, and June showed prices continuing to rise at a slower pace. So we have a repeat of the period from September to November 2023, when it also began to seem that inflation had been defeated.
The last time inflation was this low was in June 2023, when it was also 3%. The peak was recorded in June 2022 at 9.1%.
Will the Fed start cutting?
This is all good news. The Fed could theoretically take a risk and start cutting rates now. Except that the inflation target is 2%. Jerome Powell, who heads the central bank, stubbornly repeats that the cuts will begin when he and his aides are certain that the CPI is heading toward 2%. During a recent debate in the US Senate, he said directly that premature cuts are too risky and could undo the authorities’ efforts so far.
There is another side to the coin, though. These are other data: those concerning the labor market. The unemployment rate in the US rose from 4% to 4.1% in a month. This decimal place means a jump in the number of people looking for work, by 162 thousand.
The latter is a clear signal to the Fed: the market is cooled and continuing to maintain interest rates carries the risk of recession. In practice, this means that the central bank has stifled the flow of money into the economy with its policies. This translates into a drop in inflation, but also greater caution among companies in hiring people.
So Powell is standing on a thin layer of ice. One step too many could mean a dip in icy water.
What about bitcoin?
The cryptocurrency market is waiting for cuts. According to the Fed Watch Tool, the probability of the first cut in September is already over 86%. Before the publication of the inflation data, it was about 10 percentage points lower.

Bitcoin, however, did not react to the news with big gains. The price is currently just over $57,000, which means the price is down by 1.17% on a daily basis. However, over the week, bitcoin is up 5%.
Ether is doing better. 1 ETH is currently worth $3,084, which translates to a 7% jump over 7 days. The price has not changed since yesterday.