US CPI comes in lower than expected, but April rate cut still unlikely

Q: What was the US Consumer Price Index increase for March 2023?

The US Consumer Price Index increased by 0.9% in March 2023.

Q: How much did year-over-year inflation rise according to the latest CPI report?

Year-over-year inflation rose by 3.3% according to the latest CPI report.

Q: What factors contributed to the rise in inflation in March 2023?

The rise in inflation in March 2023 was primarily driven by a nearly 11% increase in energy prices, including a 21.2% rise in gasoline prices.

The United States Bureau of Labor Statistics (BLS) published the Consumer Price Index (CPI) data for March, showing a 0.9% month-over-month rise in headline CPI inflation.

CPI inflation is up 3.3% year-over-year, according to the BLS report published Friday. Although inflation came in slightly lower than analyst expectations, inflation remains elevated above the Federal Reserve’s 2% target.

A surge in energy prices from the Iran war drove March’s inflation figures, with the energy index rising by nearly 11%, led by a 21.2% rise in gasoline prices, the BLS report said.

Federal Reserve, Bitcoin Price, United States, Inflation, Interest Rate

12-month CPI percentage changes, broken down by category. Source: BLS

Managing inflation is part of the Federal Reserve’s dual mandate of price stability and maximum employment, which influences its decision-making on interest rates and broader monetary policy.

Bitcoin (BTC) and cryptocurrency prices are significantly impacted by interest rate policy, with lower interest rates stimulating asset prices by expanding credit that flows into financial markets and higher rates restricting capital flows and asset prices.

Traders see no chance of interest rate cuts at April Fed meeting

Investors forecast a 0% chance of an interest rate cut at the April Federal Open Market Committee (FOMC) meeting, according to CME Group’s FedWatch tool.

The odds that the FOMC will keep rates on hold are 98.4%. Rate cut odds increase only incrementally throughout the year.

Interest rate target probabilities for the April FOMC meeting. Source: CME Group

FOMC members are divided on further rate cuts in 2026, due to inflationary pressures from the ongoing war, and rate hikes have not been ruled out.

Bitcoin rises on latest CPI print

The price of Bitcoin (BTC) rose by over 1.5% on Friday, briefly tapping the $73,000 level following the latest CPI print.

“The $73,000–$75,000 zone is our next major target,” said Matt Mena, senior crypto research strategist at crypto exchange-traded product provider 21shares.

“If BTC clears this, expect a brief period of sideways consolidation before a test of $80,000. Should the Clarity Act pass, the stage is set for $100,000 BTC and a $3 trillion–$3.2 trillion total crypto market cap by the end of Q2,” he added.

Magazine: Big Questions: Can Bitcoin save you from the dreaded Cantillon Effect?