U.S. inflation data met expectations on Wednesday, reinforcing expectations that the Federal Reserve will keep interest rates steady not only at its March 18 meeting, but likely at its April meeting as well.
The Consumer Price Index (CPI) increased by 0.3% in February, according to a report from the Bureau of Labor Statistics. Economists expected an increase of 0.3% and that of January was 0.2%.
On an annual basis, the CPI rose 2.4% versus expectations of 2.4% and 2.4% in January.
The core CPI, which excludes food and energy costs, rose 0.2% in February versus a forecast of 0.2% and 0.3% in January. The year-over-year core CPI rose 2.5% from forecasts of 2.5% and 2.5% in January.
Under slight pressure for the morning, bitcoin was trading at $69,500 in the minutes after the report was released, down 1.2% in the past 24 hours.
U.S. stock index futures were slightly lower across the board and the 10-year Treasury yield climbed to 4.18%. The main player in the markets this week, WTI crude oil rose 4.2% to $87 per barrel.
Before the data was released, markets were pricing in a 99% chance that the Federal Reserve would keep interest rates unchanged at its March meeting next week, according to the CME FedWatch tool. For the April meeting, the odds of a rate cut were just 11%, down from 21% a month ago.
February’s inflation numbers, of course, are fairly old news given events since then, namely the war in Iran and soaring oil prices. The impact of this on the Fed’s thinking on interest rates is likely to become more evident after next week’s policy meeting.
