3 min readMay Inflation Figures Offer Relief
The May US inflation data came in softer than expected, with both headline and core Consumer Price Index (CPI) increasing just 0.1% month-on-month, below the anticipated 0.2%. This moderation is reassuring for markets.
Notably, prices in several tariff-sensitive categories—such as apparel (-0.4%) and new vehicles (-0.3%)—declined, suggesting that businesses have yet to pre-emptively raise prices in anticipation of tariff impacts. Airline fares also fell for the fourth straight month, while rent inflation was subdued at 0.3% MoM.
This softening in services and the absence of significant tariff-related pass-through in goods such as apparel, used cars, and new vehicles indicate that existing inventories may still be buffering cost pressures. Any delayed price effects may begin to emerge during the summer as inventories deplete.
Complementing the CPI release, May’s Producer Price Index (PPI) also pointed to restrained inflation, even under the backdrop of President Trump’s heightened tariff regime. This further solidifies the Federal Reserve’s case to consider accelerating interest rate cuts, aligning with market expectations.
Despite concerns over fiscal deficits, US Treasury yields remain anchored—10-year yields under 4.50% and 30-year yields below 5%. Meanwhile, the trade-weighted US dollar has declined 9.7% year-to-date, reaching its lowest point since early 2022. While Bitcoin has yet to react positively, its historically inverse correlation with the dollar and the prospect of lower rates suggest medium-term support.
Though current data is benign, inflationary risks from tariffs haven’t vanished. The Fed’s recent Beige Book highlighted widespread expectations of rising costs, with several districts describing these pressures as "strong," "significant," or "substantial." Many businesses expect to pass on tariff-related costs within three months, meaning July and August could bring stronger inflation prints. Headline CPI may still trend toward 4% YoY in Q3.
Sustained Inflows and Technical Progress for Ethereum
Ethereum continues to attract investor attention, marking eight consecutive weeks of inflows totaling US$2.3 billion. The latest daily inflow of US$256 million was the highest since early February this year.
Several developments are fueling this momentum:
Pectra Upgrade (May 7th): While incremental, the protocol changes pave the way for future scalability improvements—a long-standing bottleneck for Ethereum.
Leadership Change: The Ethereum Foundation appointed Tomasz Stańczak as Co-Executive Director. He brings significant engineering and execution-client expertise and is viewed as a pragmatic, delivery-focused leader with strong community backing.
Further boosting sentiment, the SEC recently released a statement suggesting that in many cases, staking activities do not constitute securities offerings. This opens the door for staking to be permitted in Ethereum ETFs—an enhancement long anticipated by institutional investors and likely to further drive inflows.
In addition, legislative developments such as the GENIUS and Stable Acts are poised to bolster Ethereum’s ecosystem. By encouraging broader stablecoin adoption and DeFi-TradFi integration, these policies play to Ethereum’s strengths: a dominant DeFi market and a stablecoin supply exceeding US$120 billion.
Stripe Acquires Privy to Strengthen Crypto Infrastructure
Stripe’s acquisition of Privy supports its mission to simplify digital payments by enabling businesses to embed crypto wallets directly into their platforms. This eliminates onboarding friction and mirrors Stripe’s existing approach to traditional payments via easy-to-integrate APIs.
While the deal’s terms weren’t disclosed, Privy was valued at $230 million in March 2025, and Stripe likely paid a premium given market conditions and Privy’s rapid growth.
The acquisition follows Stripe’s $1.1 billion purchase of Bridge earlier this year, highlighting a broader strategy to accelerate its expansion into crypto and stablecoin infrastructure. Together, Privy and Bridge bring Stripe access to advanced technologies, a combined user base of over 75 million, major enterprise clients, and experienced talent—giving Stripe a competitive edge against firms like Square and PayPal.
