The U.S. Consumer Price Index (CPI) data for last month was unchanged, down from 0.3% in April. The year-over-year (YoY) CPI also decreased from 3.4% in April to 3.3% in May, which was better than expected.
Core CPI YoY levels dropped from 3.6% to 3.4% last month, marking the lowest rate since April 2021. The general consensus had predicted a 3.5% point for this index.
Following the improved data, the total crypto market cap grew by 3% to reach $2.65 trillion, as reported by CoinGecko. There was noted “aggressive buying” of June 13 calls and increased funding rates, suggesting market positioning for an upside move.
Analysts from QCP Capital commented that “A neutral FOMC outcome could propel the crypto market to retest its highs once more.” They also highlighted the potential for cryptocurrencies and risk assets to see liquidity inflows if the Fed mirrors decisions from other apex banks.
The recent rate cuts by the European Central Bank and the Bank of Canada have influenced market sentiment. The U.S. dollar index (DXY) rose to a 30-day high following the news, implying that more capital became available for investments.