US 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 also likely at the bank’s April meeting.
The consumer price index (CPI) rose 0.3% in February, according to a report from the Bureau of Labor Statistics. Economists’ forecasts had been for a 0.3% increase, and January’s increase was 0.2%.
On an annual basis, CPI was higher at 2.4% against expectations of 2.4% and January’s 2.4%.
Core CPI, which excludes food and energy costs, rose 0.2% in February against forecasts of 0.2% and January’s 0.3%. Year-on-year core CPI was higher at 2.5% compared to forecasts of 2.5% and January’s 2.5%.
Under modest pressure for the morning, bitcoin traded at $69,500 in the minutes following the report, down 1.2% over the past 24 hours.
US stock index futures were slightly lower across the board and the 10-year Treasury yield ticked up to 4.18%. The main player in the markets this week, WTI crude was higher by 4.2% at $87 a barrel. barrel.
Ahead of the data, markets were pricing in a 99% probability that the Federal Reserve would leave interest rates unchanged at its March meeting next week, according to the CME FedWatch tool. For the meeting in April, interest rate cut odds were only 11% against 21% a month ago.
Of course, February’s inflation numbers are somewhat old news given the events that have occurred since then, namely the war in Iran and rising oil prices. How much this plays into the Fed’s thinking on interest rates should become clearer after next week’s policy meeting.
