Rising oil prices associated with the war in the Middle East were the primary driver of the anticipated acceleration in U.S. inflation last month. However, there was a negative surprise in Core prices.
On Friday, the Bureau of Labor Statistics released a report showing that the Consumer Price Index (CPI) increased 0.9% in March. The 0.3% gain in February was lower than the 0.9% growth that economists had predicted. Contrary to predictions of 3.3% and February’s 2.4%, CPI was 3.3% higher year-over-year.
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Bitcoin and other risk assets may take a major blow if US inflation data shows a significant rise in the value of the dollar. According to CMC’s statistics, Bitcoin has risen 1.62% in the previous 24 hours and is now trading at $72,270.
A more muted increase of 0.2% in March compared to predictions of 0.3% and February’s 0.2% was recorded by core CPI, which does not include energy and food prices. Core CPI increased 2.6% year-over-year, which was higher than both February’s 2.5% and the 2.7% forecasted.
After hours of trading in a narrow range around $72,000, the price of bitcoin surged to $72,400 only moments after the news was announced. The Nasdaq 100 index rose 0.3%, while futures for U.S. market indexes also rose little. At 4.29%, the yield on the 10-year U.S. Treasury remained unchanged.
In light of the recent developments in the Iranian conflict and the subsequent spike in oil prices, the market has recently changed its expectations for the Federal Reserve’s monetary policy. Instead of expecting a series of rate cuts this year, traders now anticipate one or more rate rises.
In the late-April meeting, there is a 99% likelihood that the Fed would remain on hold; in the mid-June meeting, the odds were 97%, according to CME FedWatch, which was released before this morning’s data.