In March, US inflation accelerated as expected. It was reported that the increase in energy prices was especially linked to conflicts in the Middle East. A slower increase was observed in the indicator known as core inflation, which excludes energy and food expenditures, compared to general predictions.
According to data announced by the US Bureau of Labor Statistics on Friday, the Consumer Price Index (CPI) increased by 0.9 percent in March. Economists’ estimates were also at 0.9 percent. In February, the CPI increase was recorded as 0.3 percent.
Core inflation remained below forecasts
On an annual basis, CPI increased by 3.3 percent in March, higher than expectations and the level of 2.4 percent in February. Core inflation, which excludes energy and food prices, increased by 0.2 percent in March. This rate fell short of economists’ forecast of 0.3 percent. Core inflation in February was also at 0.2 percent.
The annual change in core inflation was announced as 2.6 percent as of March. Economic forecasts predicted that this rate would be 2.7 percent. In the previous month, annual core inflation was at 2.5 percent.
Bitcoin price and reflection on market policies
Before the inflation data was released, Bitcoin was trading in a narrow range around $72,000. Following the data, Bitcoin price climbed to $72,400. Cryptocurrency markets continue to follow a sensitive course against macroeconomic indicators announced in the USA.
In recent weeks, there has been a rapid increase in energy and especially oil prices due to the war environment in Iran. This situation also led to changes in market expectations. While it was previously predicted that the US Federal Reserve (Fed) could cut interest rates more than once this year, recent developments have been interpreted as indicating that interest rate increases may also be on the agenda. However, after the March inflation, markets began to expect no change in the Fed’s current monetary policy.
According to market evaluations made through the CME FedWatch tool, the probability of keeping interest rates constant at the Fed meeting at the end of April is at 99 percent. For the June meeting, this probability was calculated as 97 percent.
