The U.S. Bureau of Labor Statistics reported that headline CPI increased 0.9% month-on-month in March and 3.3% from a year earlier, accelerating from February's 2.4% annual pace and remaining above the Federal Reserve's 2% target. Core CPI, which strips out food and energy, rose 2.6% annually — slightly below the 2.7% consensus estimate.
Energy Costs Dominate March Inflation
The energy index surged nearly 11% during the month, with gasoline prices spiking 21.2%, making fuel the primary driver of the latest price pressure. March marked the first full month reflecting the impact of the U.S.-Iran conflict on energy markets. In contrast, February CPI rose just 0.3% monthly and 2.4% yearly.
While core inflation came in softer than expected, overall price growth remains elevated. The report keeps the Fed under pressure to maintain its restrictive stance, especially given robust labor market conditions.
Bitcoin Rebounds Above $72,000
Following the CPI release, Bitcoin briefly touched $73,000 before settling above $72,000. At the time of writing, BTC traded at $72,780, up 1% over 24 hours and 9% over the past seven days. Traders viewed the slightly cooler core inflation reading as a signal that aggressive rate hikes are less likely in the near term, offering a tailwind for risk assets.
Fed Expected to Hold in April
The CME FedWatch Tool shows a 98.4% probability that the Federal Open Market Committee will keep rates unchanged at its April meeting, with only a 1.6% chance of a cut. Policymakers have reiterated they need more evidence of sustained disinflation before easing. Given surging energy costs, markets have pushed expectations for the first rate cut to late 2026.