The latest data from the Bureau of Labor Statistics (BLS) revealed a slowdown in inflation in April, impacting the Federal Reserve's decisions on interest rates. The Consumer Price Index (CPI) report, released at 8:30 AM EST, showed a 2.3% annual inflation rate in the US, slightly lower than the previous month.

This slight decrease in inflation, the third consecutive monthly decline, came as a surprise to the market and affected Bitcoin's price marginally. Despite the cooling inflation, the overall sentiment remained bullish, with Bitcoin's price reacting modestly to the data.

The CPI report, a vital indicator of inflation, is crucial in shaping the Fed's monetary policy. If inflation rises, markets usually expect interest rate hikes, while decreasing inflation pressures could lead to calls for rate cuts. Following the latest data, there is an 88.6% probability that the Fed will maintain the current interest rates in the upcoming meeting on June 18.

Fed Chair Jerome Powell acknowledged that near-term inflation expectations rose due to tariffs, prompting caution in adjusting policy. However, some argue that President Trump's call for rate cuts amidst the tariff impact may have merit. Yet, the full impact of tariffs on inflation may take some time to materialize in economic data, according to the Fed.

Powell emphasized the need to await further economic clarity before making significant policy adjustments, suggesting that potential tariff impacts should be observed in data before influencing monetary decisions. Thus, despite current uncertainties, maintaining a cautious stance appears to be the Fed's strategy as they monitor evolving economic conditions.