The US CPI fell in March; the benchmark rate increased by just 0.1%.
The question is whether the new inflation data will bolster rate cut hopes or boost Bitcoin's price, as the data comes before the recent major tariff announcements last week.
James Van Straten | Edited by Stephen Alpher Updated April 10, 2025, 8:24 PM Published April 10, 2025, 12:36 PM
Key points:
- The US consumer price index increased much less than expected in March.
- Bitcoin's price rose slightly after the data was released.
- The Fed's next meeting is scheduled for May, and traders currently expect the central bank to take no action.
U.S. inflation actually fell to a broad-based rate last month and the benchmark interest rate was little changed, potentially reigniting debate over whether the Federal Reserve will resume rate cuts at its upcoming meeting in May.
The consumer price index (CPI) fell 0.1% in March. Economists had forecast a 0.1% increase after a 0.2% rise in February. On an annualized basis, core CPI increased just 2.4%, compared with forecasts of 2.6% and 2.8% in February.
The core CPI, which excludes volatile food and energy prices, rose just 0.1% in March, compared with expectations for a 0.3% gain and 0.2% in February. The core CPI rose 2.8% year-on-year, well below expectations of 3% and February's 3.1%.
Bitcoin (BTC) prices rose modestly to over $82,000 within minutes of the news. Following yesterday's record gains, U.S. stock index futures are under pressure Thursday morning, with the Nasdaq 100 down 2.7% and the S&P 500 down 2.1%.
Of course, Thursday morning's CPI report includes data leading up to President Trump's “Liberation Day,” when he announced massive tariffs last week that sparked days of market panic, some of which was reversed yesterday after the president's 90-day hiatus.
Before the tariff pause and the market recovery, traders were actively pricing in the likelihood of a rate cut at the Fed's next meeting in May. However, shortly before the CPI data was released, those odds had shrunk to just 17%. June now looks like a meeting where action could be taken, with a 75% chance of a rate cut of 25 basis points or more by the end of the event.
Looking ahead, attention will focus on Friday's producer price index (CPI) report, which could further weigh on expectations for Fed policy in May.
