February inflation in the U.S. dropped to 0.4% from 0.5% in January, in line with economists’ estimates, the Bureau of Labor Statistics (BLS) said Tuesday.
On a year-over-year basis, inflation slowed to 6.0% from 6.4% the month before, also in line with estimates.
The core rate of inflation – which strips out food and energy costs – increased more than forecast to 0.5% in February versus 0.4% in January, and against forecasts for 0.4%. The year-over-year core rate was 5.5%, as expected, compared with 5.6% in January.
The bitcoin price (BTC) rose to a nine-month high of $25,484 in the minutes following the report. The world’s largest cryptocurrency extended the advance, reaching $25,984, marking an 18% gain over the past 24-hours.
Inflation concerns have become secondary over the past few days as investors, the government and the Federal Reserve have had to deal with the possible systemic implications of multiple bank failures.
Less than one week ago, traders had been betting the Fed would hike the benchmark fed funds rate by 50 basis points at its March meeting. Following the collapse of Silicon Valley Bank on Friday and the shutdown of Signature Bank over the weekend, traders quickly pivoted and are now pricing in only the slimmest chance of any rate hike in March and rate cuts by mid-summer.
UPDATE (March 14, 12:55 UTC): Adds chart, 24-hour bitcoin performance.
