U.S. inflation data met expectations on Wednesday, reinforcing anticipation that the Federal Reserve will keep interest rates steady not only at its March 18 meeting, but likely at the bank’s April meeting as well.
The Consumer Price Index (CPI) rose 0.3% in February, according to a report from the Bureau of Labor Statistics. Economists’ forecasts were for a 0.3% increase and January’s increase was 0.2%.
Year-over-year, the CPI rose 2.4% versus expectations of 2.4% and 2.4% in January.
Core CPI, which excludes food and energy costs, rose 0.2% in February versus forecasts of 0.2% and 0.3% in January. Year-over-year core CPI rose 2.5% versus forecasts of 2.5% and 2.5% in January.
Under modest morning pressure, bitcoin It was trading at $69,500 in the minutes following the report, a drop of 1.2% in the last 24 hours.
US stock index futures fell slightly across the board and the 10-year Treasury yield rose to 4.18%. The main player in the markets this week, WTI crude oil, rose 4.2% to $87 per barrel.
Before the data, markets were pricing in a 99% chance that the Federal Reserve would leave interest rates unchanged at its March meeting next week, according to the CME FedWatch tool. By the April meeting, the odds of rate cuts were just 11% compared to 21% a month ago.
February’s inflation numbers, of course, are somewhat old news given the events that have occurred since then, namely the war in Iran and rising oil prices. The extent to which this influences the Federal Reserve’s thinking on interest rates should become more evident after next week’s policy meeting.
