U.S. CPI, PPI leave Fed on hold

U.S. markets spent the middle of the week recalibrating after back-to-back inflation reports kept pressure on expectations for Federal Reserve easing. April consumer prices rose 3.8% from a year earlier and 0.6% from March, while core CPI increased 2.8% annually and 0.4% on the month, according to data reported Tuesday. Bitcoin traded around $80,000 to $81,000 on Thursday, with live pricing across major crypto venues showing a 24-hour range that briefly topped $81,200. CME Group’s FedWatch tool says traders use fed funds futures to gauge the probability of Federal Open Market Committee moves, and the next meeting is about five weeks away. The tool itself does not interpret the inflation reports, but it is the market reference traders cite when they say the data left the Fed on hold. (cnbc.com) (coinmarketcap.com) ### Which inflation numbers changed the market’s tone? April CPI was the first shock. CNBC, citing the Bureau of Labor Statistics report, said headline CPI rose 0.6% on the month and 3.8% on the year, above consensus on the annual figure and the highest yearly pace since May 2023. Core CPI, which excludes food and energy, rose 0.4% on the month and 2.8% from a year earlier. (cmegroup.com) April PPI added to that picture a day later. Market coverage on Wednesday described producer prices as accelerating sharply, with one report putting annual PPI at 6.0%, a level not seen since 2023. That reinforced the view among traders and analysts that inflation pressure had not eased enough to support an imminent rate cut. ### Why did traders talk about a Fed hold instead of a hike? (cnbc.com) CME Group says FedWatch probabilities are derived from 30-day fed funds futures and are meant to reflect market expectations for upcoming FOMC meetings. That is the benchmark most desks use when they say markets are pricing “no change” rather than a fresh tightening move. (beincrypto.com) The inflation data mattered because the Fed’s next scheduled meeting is still weeks away. CME’s FedWatch page showed on Thursday that the next FOMC meeting was in 36 days, which puts the June decision after another full round of labor-market data. ### Why were Bitcoin and crypto traders watching Washington at the same time? (cmegroup.com) Bitcoin was trading near the same round-number level that crypto traders had been treating as a near-term marker. CoinMarketCap showed Bitcoin at about $80,479 on Thursday, Coinbase showed about $81,063, and Kraken showed a 24-hour high above $81,262. The Senate Banking Committee has a crypto milestone on its calendar for May 14. (cmegroup.com) The committee’s hearing page says members will meet in executive session at 10:30 a.m. in Dirksen 538 to consider H.R. 3633, the Digital Asset Market Clarity Act of 2025. Chairman Tim Scott, Senator Cynthia Lummis and Senator Thom Tillis released bill text on May 12 ahead of the markup, according to the committee newsroom. (coinmarketcap.com) ### What exactly is the Senate considering? H.R. 3633 is the Digital Asset Market Clarity Act of 2025, according to the Senate Banking Committee notice. The committee’s Republican leadership has described the bill as a market-structure framework for digital assets, with provisions aimed at investor protections, anti-fraud oversight and clearer lines of regulation. (banking.senate.gov) The bill has already moved through the House process in earlier form. A Senate Banking Committee release from July 2025 said the Senate discussion draft built on the CLARITY Act after it passed the House with bipartisan support. (banking.senate.gov) ### What are markets waiting for next? The next Fed milestone is the June FOMC meeting, which CME’s FedWatch countdown places 36 days from Thursday. Between now and then, traders will get another monthly employment report and can compare labor-market strength against the inflation readings from April. Thursday’s immediate event is in the Senate. (banking.senate.gov) The Banking Committee’s executive session on the CLARITY Act is scheduled for May 14 at 10:30 a.m. ET, and the committee says live video will be available when the hearing starts. (banking.senate.gov) (cmegroup.com)