The Consumer Price Index (CPI) unexpectedly climbed in March, shattering hopes for a rate cut from the Federal Reserve this summer. The CPI rose 0.4%, exceeding the expected 0.3% increase. Year on year, inflation rose to 3.5%, slightly higher than the projected 3.4%.
Core CPI, excluding food and energy, increased by 0.4%, compared to the expected 0.3%. The core inflation rate is stable at 3.8% year on year.
Bitcoin plummeted by roughly $1,000 to $68,000 soon following the news. Stock futures, including the S&P 500 and Nasdaq 100, fell by almost 1.5%. Meanwhile, the 10-year US Treasury yield rose sharply, strengthening the dollar. Gold prices also dropped.
This increase in inflation complicates the economic picture, despite expectations of monetary policy easing in the United States. Before changing monetary policies, Federal Reserve policymakers look for more consistent indicators of lower inflation. Traders have reduced their rate cut estimates, anticipating fewer cuts.
