Bitcoin Drops as Traders Anticipate July Fed Rate Hike Ahead of CPI Release

West Texas Intermediate crude futures rose to just under $80 per barrel, up from $67 at month’s start, reigniting inflation worries.

Attention Turns to CPI Data and Warsh’s Congressional Testimony

Investors will get an updated view of price pressures on Tuesday when the Labor Department releases the June consumer‑price index at 8:30 a.m. ET.

Bloomberg‑surveyed economists expect headline CPI to dip below a 4% annual rate, marking the first decrease in both headline and core inflation since January, after May’s 4.2% and 2.9% readings, respectively.

Even if the numbers align with expectations, they may be seen as lagging indicators given the recent oil price rally; a more persistent inflation reading could heighten worries about the Fed’s future policy direction.

The focus will shift to Mr. Warsh’s testimony on Capitol Hill, where the Fed chair’s inclination toward restrained forward guidance will prompt investors to scrutinize any cues regarding interest rates and inflation.

ING analysts note that Mr. Warsh may, if he wishes, underscore the modest nature of inflation expectations.

They added that Mr. Warsh possesses sufficient support to temper rate‑hike risk and remain steady; even under pressure to raise rates, the elevated level of the 5‑year Treasury curve suggests any hike would likely be reversed, keeping the outlook tilted toward larger cuts than hikes.

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