As expected, U.S. inflation accelerated last month, largely due to rising energy costs related to the Middle East conflict. However, core prices were surprised by the decline.
The Consumer Price Index (CPI) rose 0.9% in March, the U.S. Bureau of Labor Statistics said Friday. Economists had expected a 0.9% rise, compared with a 0.3% rise in February.
Compared to the same month last year, the CPI increased by 3.3% compared to the expected 3.3% and 2.4% in February.
Core CPI, which excludes food and energy costs, was further subdued, rising 0.2% in March compared to the expected 0.3% and 0.2% in February. Year-on-year core CPI rose 2.6% compared to the expected 2.7% and 2.5% in February.
While trading in a narrow range around the $72,000 level in the hours before the news, Bitcoin price rose to $72,400 in the moments following the news.
Amid the Iran war and resulting oil price hikes, markets in recent weeks have shifted from pricing in a series of Fed rate cuts to pricing in one or more rate hikes this year, and now expect no change in the U.S. central bank’s monetary policy.
Prior to this morning’s data release, the Fed had a roughly 99% chance of keeping policy unchanged at its late April meeting, and a 97% chance at its mid-June meeting, according to CME FedWatch.
