Bitcoin and Ethereum sank lower, each dropping more than 2% immediately after the U.S. Bureau of Labor Statistics announced that the Consumer Price Index increased 0.4% in March.

That means inflation last month was virtually unchanged from February and is still at 3.5%, according to the new BLS data.

At the time of writing, the Bitcoin price has slipped to below $68,000 and the Ethereum price is threatening to go lower than $3,400. Both assets—easily the two largest cryptocurrencies—account for roughly 65% of the $2.7 trillion  global market capitalization for digital assets.

High inflation rates are bad news for crypto markets—and stocks, for that matter—because as long as inflation remains high, it is unlikely that the U.S. Federal Reserve will lower federal interest rates. The longer interest rates remain high, the more it strengthens the case for traditional safe havens like treasury bonds over crypto assets.

The small bit of good news is that this morning's report isn't entirely unexpected, which should reduce volatility.

Ahead of this morning's announcement, analysts forecast that March data would show inflation had risen 3.4% compared to the same time last year. And the core CPI inflation rate, which leaves out volatile food and energy prices, was expected to drop from 3.8% to 3.7% over the same period.

Federal Reserve Chairman Jerome Powell recently said at a Stanford University event that he's confident the Fed won't raise rates in the near term. But he added that there's also no rush to reduce rates, either.

“It’s too soon to say whether recent inflation readings are more than just a bump,” he said.

The U.S. Bureau of Labor Statistics released an update to its employment data last week, showing that payrolls had risen in March and the unemployment rate was relatively unchanged at 3.8%. The news was not well received in crypto markets, which slumped last week.