US President Donald Trump told reporters that he “likes” inflation on Wednesday after government data showed consumer prices rising at the fastest annual pace in three years. The consumer price index increased by 4.2% compared to the previous year.
This reading comes one week before the Federal Reserve’s June monetary policy meeting chaired by new Chairman Kevin Warsh. Traders are now leaning toward interest rate hikes rather than cuts, which could put pressure on risk assets like Bitcoin (BTC).
Energy prices push US inflation to 3-year highs
Economic inflation It rose 0.5% in May after The Bureau of Labor Statistics reported it jumped 0.6% in April. energy Most drove The increase rose by 3.9% after a rise of 3.8% in the previous month.
The average price of gasoline is now $4.15 per gallon, according to AAA. This compares to an average of $2.98 when the US and Israel were first Iran struck on February 28. Meanwhile, real wages fell 0.1% in May, marking a decline for the second straight month.
When asked about the latest inflation numbers, Trump supported them.
“The numbers were great… I like inflation,” he said.
Trump went on to acknowledge the secret effort to direct him Millions of barrels Oil through the Strait of Hormuz. The president predicted that oil would collapse like a rock once the war ended. He had previously insisted on obstructing Iran’s path towards possessing a nuclear weapon It is “the only thing” he considers.
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Bitcoin is facing pressure as the possibility of interest rate hikes increases
Persistent inflation complicates Trump’s repeated calls to lower borrowing costs. CME FedWatch shows 98.4% chance the Fed will hold 3.5%-3.75% next week. However, markets are now pricing in more than 70% of the odds of a rate hike by the end of 2026.
This shift is important for Bitcoin. Higher interest rates typically boost dollar and Treasury yields, pulling capital away from non-yielding assets.
BTC is trading near $62,000, down about 24% over the past 30 days, according to BeInCrypto Markets. The token now sits approximately 51% below its all-time high of over $126,000. The 1% rebound over the past day has done little to repair the broader downtrend.
Warsh inherits a Fed facing accelerating rates and reduce real income. If next week’s meeting signals a tightening future, Bitcoin’s overall headwinds could strengthen in the summer.
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