US CPI data for March pointed to warmer results than expected. The data also highlighted that interest rates may remain high for some time. Bitcoin price broke the key support level after the data. Additionally, gold prices, which have risen strongly in recent days, have seen a sharp decline.
US inflation is hotter than expected!
The US Bureau of Labor Statistics announced the highly anticipated March Consumer Price Index (CPI) inflation data. Inflation at 3.5% indicated a warmer result than expected. This rate is quite high compared to analysts’ expectations of 3.4% and the previous month’s inflation figure of 3.2%. March inflation data is of great importance for financial markets in terms of evaluating the course of the Fed’s interest rate cuts.
After two disappointing inflation data in January and February, bets on the Fed’s first interest rate cuts had shifted from June to September. The data released today further strengthened the idea that the Fed’s expected inflation rate of 2% is still far from being realized. The data also underlined that interest rates will remain high for a while before the Fed begins its rate-cutting journey.
Bitcoin price broke key support level!
Financial markets are grappling with disappointing inflation data. Elsewhere, Bitcoin prices have fallen below key levels, indicating the ripple effect of market turbulence. At the time of writing, BTC is trading at $67,721.59. This means a decline of approximately 4.3% on the daily chart. However, Bitcoin is still in the green zone on its weekly chart.
Gold price falls on the back of hot US CPI!
The gold market faced a sharp sell-off as the US economy faced hotter-than-expected inflation. Following the data, gold prices broke the initial support of $2,350. At press time, the shiny metal was trading down 1.12% at $2,325 on its daily chart. The gold market is struggling as recent inflation data adds to technical selling pressure. Gold contracts for June delivery were traded at $2,348.10, down 0.59% on the day.
According to the statement, headline inflation increased by 3.5% in the last 12 months, exceeding expectations. Consensus estimates predicted a 3.4% increase. At the same time, inflation continues to show itself in producer prices. Core CPI, which excludes volatile food and energy prices, increased by 0.4%, higher than expected. The report revealed that annual core inflation increased by 3.8%, remaining unchanged compared to February.
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