Bitcoin faces a 90-minute Fed shock as CPI and Warsh testimony collide today

A notable development has hit the crypto markets. June inflation arrives at 8:30 a. ET today, and it should be the friendliest number the market has seen all year. Economists expect headline CPI to slow to roughly 3.

8% year over year from May's 4. 2%, with the monthly index forecast to decline by about 0. Almost all of that improvement traces back to US pump prices falling about 10% in June, which BMO chief economist Douglas Porter called the fourth-largest monthly decline in a decade.

Market Dynamics

Gasoline got cheap because the Strait of Hormuz reopened during the June ceasefire between Washington and Tehran. Over the weekend, President Donald Trump reinstated the blockade on Iranian shipping and demanded a 20% fee on all other cargo moving through the waterway. Oil settled more than 9% higher on Monday, with Brent closing at $83.

Brent then climbed above $87 in Tuesday's session, after beginning the month near $67. Bitcoin traded near $62,200 on Tuesday, down about 3% over 24 hours, after a Monday range from $64,273 to $61,794. Ninety minutes after the BLS data lands, Fed Chair Kevin Warsh takes his seat before the House Financial Services Committee for his first semiannual testimony, where lawmakers will ask him to interpret a backward-looking inflation print as markets focus on what comes next.

Warsh gets to decide what the number is worth However, when you strip out food and energy, inflation barely moved. Core CPI is expected to land between 2. 9% year over year, against May's 2.

Market Impact

9%, and the Cleveland Fed's nowcasting model puts it at 2. Renewed oil-driven inflation fears had already pushed Treasury yields higher before the CPI release. The two-year yield rose to about 4.

28%, its highest since early 2025, while the 10-year moved above 4. Money markets now assign a 40% to 50% probability to a rate hike at the July 28-29 meeting, depending on whether you take CME FedWatch or Bloomberg, and that's a pretty big spike from the 10% chance estimated at the beginning of last week. Fed Governor Christopher Waller was the one who supplied the trigger, warning the central bank may need to raise rates if core inflation runs hot.

None of this was even in the conversation around inflation in March, when most policymakers still penciled in a cut. By the June 17 decision, which passed 12-0 and held the target at 3. 75%, the median had flipped to a hike, and 17 of 18 officials judged that inflation risks tilted upward.

Crypto markets are watching this development closely as investors weigh its potential impact on prices.