As expected, US inflation accelerated last month, mainly driven by rising energy costs linked to the conflict in the Middle East. Base prices, however, surprised on the downside.
The Consumer Price Index (CPI) rose 0.9% in March, according to a report released Friday by the Bureau of Labor Statistics. Economists forecast an increase of 0.9%, and February’s increase was 0.3%.
On an annual basis, 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 subdued, rising 0.2% in March versus a forecast of 0.3% and 0.2% in February. The year-over-year core CPI rose 2.6% from 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 announcement, Bitcoin price rose to $72,400 in the moments following the report.
Amid the war in Iran and the resulting surge in oil prices, markets in recent weeks have moved from a series of Fed rate cuts this year to one or more rate hikes, and now expect no change in the US central bank’s monetary policy.
Before this morning’s data release, there was about a 99% chance the Fed would remain on hold at its late-April meeting and a 97% chance that would be the case at the mid-June meeting, according to CME FedWatch.
