Bitcoin Rallies as Core US Inflation Misses Forecasts

Bitcoin surged to $72,400 shortly after the Bureau of Labor Statistics released March inflation data, as core price growth came in below economist projections. The digital asset had been trading in a tight range around $72,000 prior to the announcement. While headline inflation accelerated due to energy costs stemming from geopolitical tensions in the Middle East, the core Consumer Price Index (CPI)—which strips out volatile food and energy components—provided a cooling signal to markets. Headline CPI rose 0.9% in March, matching forecasts, with a year-over-year increase of 3.3%. However, core CPI rose by only 0.2% for the month, missing the 0.3% expectation. On an annual basis, core inflation stood at 2.6%, slightly below the 2.7% forecast. This divergence highlights that while energy shocks are driving headline numbers, underlying price pressures are remaining more subdued. The data prompted a modest rally in the Nasdaq 100, which rose 0.3%, while the 10-year U.S. Treasury yield remained steady at 4.29%. The report has significantly recalibrated expectations for the Federal Reserve. After previously pricing in potential rate hikes due to oil price spikes and the conflict in Iran, traders now largely expect the central bank to maintain current rates. According to CME FedWatch, there is now a 99% probability of a hold at the late-April meeting and a 97% probability for the mid-June meeting.