According to the latest CME FedWatch Tool, traders are pricing in a 97.3% probability that the U.S. Federal Reserve will keep interest rates unchanged at its June policy meeting. The tool, which derives market expectations from federal funds futures, shows only a 2.7% chance of a 25-basis-point hike. This near-certainty extends into July, where the probability of rates holding steady stands at 84.8%, with a 14.8% chance of a cumulative 25-basis-point increase. These figures point to a cautious Fed maintaining its stance through the summer as policymakers weigh inflation trends and incoming economic data.
However, the inflation picture remains a significant risk. The Bureau of Labor Statistics reported that the Consumer Price Index for April rose 3.8% year-over-year, driven largely by a surge in energy costs—gasoline alone climbed 5.4% for the month. The next CPI release, scheduled for June 10, is expected to show inflation accelerating to 3.9% annually, according to market commentators like Morecryptoonl on X. While the monthly pace may ease from 0.64% to around 0.4%, the headline number could still spook markets. Energy prices, up 17.9% over the past twelve months, and rising shelter costs add to concerns that higher oil prices linked to geopolitical tensions are filtering into broader consumer prices.
A hotter-than-expected CPI print would likely dampen already fragile rate-cut expectations. For risk assets like Bitcoin and equities, any extension of the Fed's hiking timeline tends to trigger pullbacks. The April reading already left little room for optimism, and a 3.9% May figure could firmly delay policy easing. With the CME FedWatch Tool now reflecting a nearly unanimous expectation of a June hold, all eyes are on the June 10 CPI release, which could reshape the rate outlook and sharply impact crypto markets.
