Key Takeaways
- March's CPI increased by 0.4%, exceeding expectations and reaching a 3.5% year-over-year rise.
- Core CPI also rose by 0.4%, with a year-over-year increase of 3.8%.
- Persistent inflation has led to reduced expectations for Federal Reserve rate cuts in 2024.
The Consumer Price Index (CPI) for March rose by 0.4%, higher than the anticipated 0.3%.
This increase matches February’s rate. On a year-over-year basis, the CPI escalated to 3.5%, exceeding the expected 3.4%.
Core CPI and market reactions
Excluding food and energy, the core CPI also saw a 0.4% rise in March.
This figure aligns with the previous month’s rate and surpassed the expected 3.7% with a 3.8% increase year-over-year.
Following the report, Bitcoin’s price dropped over 1% to $68,200 due to concerns that a rate cut may not come in the near future.
Implications for U.S. monetary policy
Expectations for Federal Reserve rate cuts in 2024 have diminished due to persistent inflation.
With inflation remaining above the Fed’s 2% target, traders have adjusted their rate cut expectations, now anticipating a potential initial cut in September.
