As expected, US inflation accelerated last month, primarily driven by rising energy costs linked to the Middle East conflict. However, core prices 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%.
On an annual basis, CPI was higher at 3.3% against expectations of 3.3% and February’s 2.4%.
Core CPI, which excludes food and energy costs, was more subdued, rising 0.2% in March against forecasts of 0.3% and February’s 0.2%. Year-on-year core CPI rose 2.6% against forecasts of 2.7% and February’s 2.5%.
Trading in a tight range around the $72,000 level in the hours ahead of the news, the price of bitcoin rose to $72,400 moments after the report.
US stock index futures also showed modest gains, with the Nasdaq 100 up 0.3%. The 10-year US Treasury yield was flat at 4.29 per cent.
Amid the war in Iran and the resulting rise in oil prices, markets have shifted in recent weeks from pricing in a series of Fed rate cuts this year to pricing in one or more rate hikes, and now expect no change in the US central bank’s monetary policy.
Prior to this morning’s data, there was about a 99% chance the Fed would hold its meeting in late April and a 97% chance of the same at the mid-June meeting, according to CME FedWatch.
