BlockBeats News, July 14th. In the past 24 hours, Bitcoin has dropped by over 2%, currently trading at around $62,380. The market has significantly ramped up its expectation of the Fed raising rates in July, with the Fed Funds futures pricing in a 50% probability of a rate hike this month, up from just about 10% a few days ago.

This shift in expectations came after Fed Governor Waller suggested that officials may need to hike rates to control price pressures. The U.S. two-year Treasury yield has risen to 4.29%, reaching its highest level since the beginning of last year. Escalating U.S.-Iran tensions and a sharp increase in oil prices have also heightened inflation concerns, with WTI crude oil futures climbing from around $67 per barrel at the beginning of the month to nearly $80.

The U.S. Labor Department is set to release the June Consumer Price Index on Tuesday. Economists surveyed by Bloomberg expect the overall CPI year-on-year increase to drop below 4%, with both the headline and core inflation likely to see their first declines since January; in May, they were at 4.2% and 2.9%, respectively. However, the recent surge in oil prices may lead the market to view this data as a lagging indicator. If inflation proves to be more persistent, it could further reinforce the concerns about rate hikes.

The market will then turn its attention to Fed Chair Powell's testimony before Congress. ING analysts believe Powell may emphasize that inflation expectations remain relatively tame and there is sufficient rationale to keep rates unchanged; even if there is a rate hike eventually, it could be reversed later, with future rate cuts potentially outweighing the rate hike.