CPI Moves Markets Green, For Now

Goods marked a 0.4% month-over-month price increase, compared with a 0.5% monthly increase in January, which is in line with analysts’ expectations

article-image

Source: Shutterstock / Twinsterphoto, modified by Blockworks

share

After a bleak weekend for markets fearful of the ongoing banking crisis, equities and cryptos saw a mild turnaround Tuesday on promising inflation data that may signal a more dovish Federal Reserve next week. 

Prices in February rose 6% year-over-year, Consumer Price Index data released Tuesday shows. Goods marked a 0.4% month-over-month price increase, compared with a 0.5% monthly increase in January, which is in line with analysts’ expectations. 

Core CPI, which excludes food and energy, rose 0.5% month-over-month and 5.5% over the year. 

Cryptos rallied on the news, with bitcoin initially surging over 7% doubling the rate of ether’s rise — up 3.5% immediately following the release of the report. Equities moved into the green during pre-market trading, with the S&P 500 and Nasdaq Composite indexes gaining close to 1% each. 

Bitcoin dominance is now at its highest level since June 2022.

While cryptos have bounced on recent news of bank closures and government bailouts, stocks have struggled this week. The Nasdaq Composite and S&P 500 indexes are both trading more than 4% lower in the past 5 trading days, cutting into what appeared to be promising year-to-date gains up until recently. 

February’s inflation numbers were primarily driven by housing costs, the Bureau of Labor Statistics noted, with shelter accounting for over 70% of the monthly increase. Airfare and household furnishings also saw price increases last month.

The Fed is set to convene next week for its policy-setting meeting. The central bank’s rate decision will be released Wednesday, March 22. Markets are still confident that the Fed will opt for a 25 basis point increase, with CME futures pricing in an 81% probability as of Tuesday morning.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

Why that the bull market might not start until 2025

article-image

August’s annual headline figure came in at 2.3% after an upward revision Thursday, so things are moving in the right direction 

article-image

MSTR’s stock price was roughly $248 at 2 pm ET Thursday

article-image

Ever since rates came off zero and fiscal deficits exploded, markets have started paying close attention to how the government is funding itself

article-image

Solana memecoins are collectively at an all-time high

article-image

Optimistic rollups like Optimism, Arbitrum and Base are seeing rapid adoption relative to zk rollups