Bitcoin ticked higher after U.S. inflation data showed core prices rising less than expected, even as headline CPI was lifted by energy costs tied to tensions in the Middle East.
The Bureau of Labor Statistics reported Friday that the Consumer Price Index climbed 0.9% in March — in line with forecasts and up from February’s 0.3% increase. On an annual basis, CPI rose 3.3%, matching expectations and accelerating from 2.4% a month earlier. The jump was driven largely by higher energy prices amid regional conflict.
But the inflation picture beneath the surface was calmer: core CPI, which strips out food and energy, increased just 0.2% in March versus a 0.3% forecast (and unchanged from February’s 0.2%). Year-over-year core inflation was 2.6%, slightly below the 2.7% economists had penciled in.
Crypto markets reacted quickly. Bitcoin, which had been trading in a tight range near $72,000 ahead of the release, rose from about $71,506 to roughly $72,400 in the minutes after the report. U.S. stock futures also edged up — the Nasdaq 100 adding about 0.3% — while the 10-year Treasury yield held steady at 4.29%.
The data help explain recent market repricings. Over the past weeks, investors shifted from expecting multiple Fed rate cuts to pricing in the possibility of hikes, and more recently to anticipating no change in policy. Ahead of this morning’s report, CME FedWatch assigned roughly a 99% chance the Fed will hold rates at its late-April meeting and about a 97% chance of no change at the mid-June meeting.
For crypto traders, the takeaway is nuanced: headline inflation remains vulnerable to geopolitical-driven energy shocks, but softer core inflation could temper expectations for sustained tightening — a dynamic that tends to support risk assets like Bitcoin unless energy-driven price pressure reaccelerates.
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