US President Donald Trump told reporters he “loves” inflation on Wednesday after government data showed consumer prices rising at the fastest annual pace in three years. The Consumer Price Index (CPI) climbed 4.2% from a year earlier.

The reading lands one week before the Federal Reserve’s June policy meeting under new Chair Kevin Warsh. Traders now lean toward rate hikes rather than cuts, which could pressure risk assets like Bitcoin (BTC).

Inflation rose 0.5% in May after a 0.6% jump in April, the Bureau of Labor Statistics reported. Energy drove most of the increase, climbing 3.9% after a 3.8% rise the prior month.

Gasoline now averages $4.15 per gallon, according to AAA. That compares with an average of $2.98 when the US and Israel first struck Iran on February 28. Meanwhile, real wages fell 0.1% in May, marking a second straight month of declines.

When asked about the latest inflation numbers, Trump embraced them. 

“The numbers were great…I love the inflation,” he said.

Trump went on to acknowledge a covert effort to route millions of barrels of oil through the Strait of Hormuz. The president predicted oil would “come down like a rock” once the war ends. He previously insisted that blocking Iran’s path to a nuclear weapon is the “only thing” he considers.

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'You know what I really love? I love the inflation,' President Trump said, appearing to embrace the data showing inflation has risen more than ‌4% and reiterated his belief that prices will fall as soon as the Iran war ends https://t.co/FHsVen9iGF pic.twitter.com/9XRFChG69d

Persistent inflation complicates Trump’s repeated calls for lower borrowing costs. CME FedWatch shows a 98.4% chance the Fed holds at 3.5%–3.75% next week. However, markets now price more than 70% odds of a rate hike by the end of 2026.

That shift matters for Bitcoin. Higher rates typically strengthen the dollar and Treasury yields, drawing capital away from non-yielding assets. 

BTC trades near $62,000, down almost 24% over the past 30 days, according to BeInCrypto Markets. The token now sits roughly 51% below its all-time high of over $126,000. A 1% bounce over the past day has done little to repair the broader downtrend.

Warsh inherits a Fed facing accelerating prices and softening real incomes. If next week’s meeting signals tightening ahead, Bitcoin’s macro headwinds could strengthen into the summer.

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