As expected, US inflation accelerated last month, driven mainly by rising energy costs linked to the Middle East conflict. Underlying prices, however, surprised to the downside.
The consumer price index (CPI) rose 0.9% in March, according to a Friday report from the Bureau of Labor Statistics. Economists had forecast a 0.9% increase and February’s increase was 0.3%.
Year-over-year, the CPI rose 3.3% versus expectations of 3.3% and 2.4% in February.
The core CPI, which excludes food and energy costs, was more moderate, rising 0.2% in March versus forecasts of 0.3% and 0.2% in February. Year-over-year core CPI rose 2.6% versus forecasts of 2.7% and 2.5% in February.
Trading in a tight range around the $72,000 level in the hours leading up to the news, bitcoin price it rose to $72,400 in the moments following the report.
US stock index futures also posted modest gains, with the Nasdaq 100 rising 0.3%. The 10-year US Treasury yield was steady at 4.29%.
Amid the war in Iran and the resulting rise in oil prices, markets have in recent weeks shifted from pricing in a series of Federal Reserve rate cuts this year to pricing in one or more rate hikes, and now expect no change in monetary policy from the U.S. central bank.
Before this morning’s data, there was about a 99% chance the Fed would remain on hold at its late April meeting and a 97% chance the same would happen at its mid-June meeting, according to CME FedWatch.
