A fresh U.S. CPI report broadly met market expectations. The cryptocurrency market reacted positively to the release.
In February, the rise in U.S. consumer prices составил 0.4% month-on-month and 6% year-on-year. The core measure rose 5.5% г/г and 0.5% м/м. In the latter case the data were 0.1 percentage point above the forecast; in the others, they were in line.
In January CPI rose 0.5% MoM and 6.4% YoY, Core CPI up 0.4% MoM and 5.6% YoY.
The published data pointed to resilience in price growth for services components in the index. They were cited by Fed Chair Jerome Powell as an obstacle to broad inflation decline over the course of 2023.
The core measure rose 0.5% MoM, the highest in five months, and leaves open the possibility of a 25 basis-point increase at the March 22 meeting.
“The figures show that the Fed’s effort to curb inflation will not be easy. … The Fed’s task now is to set priorities for inflation that remains too high, given rising risks to financial stability from the collapse of SVB”, — TOPLive Bloomberg.
Economists differed on the Fed’s next steps—from a pause and a 0.25% hike to a rate cut at this meeting (Nomura).
Swap and option markets priced in a path of continued tightening at a slower pace. The probability of this scenario rose from 65% to 82.7% .
U.S. Treasuries reacted similarly. Stocks and currencies, by contrast, interpreted the data as not supporting a hike in the policy rate.
Total market capitalization of digital assets rose 13.3% on the day. Bitcoin jumped 14.6%, testing the $26,000 mark, Ethereum up 8.9% to $1,740, according to CoinGecko.
“It seems unlikely that the Fed will continue an aggressive rate-hiking regime,” — explained by Grayscale analysts.
Novogratz said that by the end of March the price of Bitcoin would return to $30,000.