CPI Data Was Announced: Here’s How Bitcoin Reacted
In a surprising twist, the latest U.S. Consumer Price Index (CPI) data showed inflation cooling more than expected, reigniting market chatter around a possible interest rate cut by the Federal Reserve as early as May. The crypto market—particularly Bitcoin—didn’t take long to react.
CPI for March posted a 0.1% decline, defying economist expectations of a 0.1% increase and reversing February’s 0.2% gain. On a year-over-year basis, the headline number landed at 2.4%, below the 2.6% forecast and significantly lower than February’s 2.8% reading.
The Core CPI, which excludes the more volatile food and energy prices, also underwhelmed. It rose just 0.1% in March, well below the anticipated 0.3% increase and softer than February’s 0.2%. Year-over-year, core inflation came in at 2.8%, falling short of the 3.0% estimate and down from the prior month’s 3.1%.
This softer-than-expected inflation print could give the Federal Reserve renewed flexibility to ease monetary policy, possibly resuming rate cuts as early as its next meeting.
Bitcoin’s Modest but Clear Reaction
Following the CPI release, Bitcoin (BTC) saw a modest uptick, briefly climbing above $82,000 before going back to $81.500.
While the move wasn’t explosive, it showed a clear market sentiment shift— some investors took the inflation data as a potential catalyst for a more dovish Fed.
Crypto markets are particularly sensitive to interest rate dynamics. Lower rates typically reduce the opportunity cost of holding non-yielding assets like Bitcoin, making it more attractive to both institutional and retail investors. Wednesday’s CPI figures, therefore, may have given traders a reason to lean bullish—if only slightly for now.
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