Bitcoin News Today: U.S. PPI Surges 0.9% in July 2025, Weakens Fed Rate-Cut Outlook

The U.S. Producer Price Index (PPI) surged by 0.9% month-over-month in July 2025, far surpassing the 0.2% forecast and marking the largest increase in three years [1]. This sharp rise has triggered renewed concerns about inflation, as businesses begin to pass on higher costs—especially from tariffs—to consumers, raising fears of further upward pressure on prices [3]. The annual increase in PPI reached 3.3%, well above the Federal Reserve’s 2% inflation target and the highest 12-month gain since February 2023 [5].

The unexpected strength in PPI has significantly weakened market expectations for an imminent Fed rate cut. Traders had previously priced in a potential 50-basis-point cut in September, but the latest data has shifted sentiment. According to LSEG data, expectations for rate cuts for the remainder of 2025 have been reduced to about 56.7 basis points, down from around 63 basis points earlier [9]. This shift is reflected in the market’s reaction, with the S&P 500 and Nasdaq both pulling back from recent highs amid the fading optimism for aggressive Fed easing [2].

The U.S. dollar regained strength in currency markets, with the USD/JPY pair rebounding from a three-week low following the release of the PPI data [4]. The dollar’s resilience persisted despite strong GDP data from Japan, highlighting the dominance of inflation concerns in shaping currency movements [8]. Meanwhile, Bitcoin and other cryptocurrencies faced downward pressure as the market grappled with the implications of delayed Fed rate cuts and higher interest rates [6]. The opportunity cost of holding non-yielding assets like Bitcoin has risen, leading to a reallocation of speculative capital into yield-bearing alternatives [6].

The PPI report also impacted Wall Street, with futures pausing their recent upward trend as investors recalibrated positions based on the new data [7]. Analysts stress that while the PPI reading is a concerning signal for inflation, the Fed’s ultimate policy decision will depend on a broader range of indicators, including the upcoming CPI report and employment data [3]. The challenge for the central bank remains managing inflation without stifling economic growth, a balancing act now reinforced by the July PPI figures.

Persistent inflationary pressures imply that the “higher for longer” rate environment is likely to continue, keeping global liquidity tight and increasing volatility across asset classes. The delayed rate cut narrative is particularly significant for risk assets such as equities and cryptocurrencies, which rely on accommodative monetary policy to attract speculative inflows [6]. While short-term pressure may persist, some analysts note that prolonged inflation could renew interest in Bitcoin as a long-term hedge against fiat currency devaluation [6].

For now, the U.S. economy appears to be operating at high capacity with low unemployment, reducing the room for aggressive rate cuts. If the Fed delays easing for longer than expected, corporate investment and consumer spending—particularly on big-ticket items—could be further constrained. However, the slowdown may be more gradual than previously anticipated, with demand and investment remaining in a state of cautious restraint rather than outright contraction [3].

The July PPI data underscores the difficulty of declaring victory over inflation and reinforces the need for continued vigilance from both policymakers and investors. Until both PPI and CPI show consistent progress toward the Fed’s 2% target, the narrative of “higher for longer” rates is likely to remain dominant, shaping market expectations and asset valuations across the board [3].

Source:

[1] FastBull, https://m.fastbull.com/newsdetail/surging-ppi-weakens-rate-cut-expectations-russiaus-summit-4339834_0

[2] Instagram, https://www.instagram.com/moneyshow/reel/DNVxGNdB2xg/

[3] نور, https://noortrends.ae/en/wall-street-stumbles-as-hot-ppi-data-reignites-inflation-fears/08/15/market-updates/

[4] Mitrade, https://www.mitrade.com/insights/news/live-news/article-1-1040656-20250815

[5] Reddit, https://www.reddit.com/r/ProfessorFinance/comments/1mq35uq/cnbc_the_producer_price_index_which_measures/

[6] E27.co, https://e27.co/crypto-bleeds-and-wall-street-collapses-as-0-9-ppi-shock-triggers-fed-panic-right-now-20250815/

[7] MSN, https://www.msn.com/en-us/money/markets/futures-pause-after-steady-gains-on-wall-st-economic-data-in-focus/ar-AA1Kw0Kl?ocid=finance-verthp-feeds

[8] Mitrade, https://www.mitrade.com/au/insights/news/live-news/article-1-1041583-20250815

[9] FastBull, https://m.fastbull.com/news-detail/trump-administration-confirms-no-additional-bitcoin-purchases-4339764_0