The US CPI (Consumer Price Index) data shows inflation eased to 2.8% in February, a positive surprise as it is below the expected 2.9% Year over Year (YoY).

This softer-than-expected inflation print boosted risk appetite, as traders now see an increased probability of rate cuts by the Federal Reserve (Fed) later in the year.

US CPI Below Expectations at 2.8%

Bitcoin (BTC) responded with a modest upward move, jumping to $83,371. The surge comes as lower inflation reduces the likelihood of further tightening and supports risk-on sentiment. Stock markets also reacted positively, with major indices posting gains following the release.

While the inflation cooled in February, the Core CPI came in at 3.1% YoY, also beating estimates of 3.2%. If inflation continues to trend lower, the Fed could shift to a more dovish stance, potentially setting the stage for more liquidity entering the markets.

Many analysts view this as a tailwind for Bitcoin, which has historically benefited from easier monetary conditions. Now, all eyes are on the Fed’s upcoming policy guidance as traders look for confirmation that the path to rate cuts is opening up.

“A high print would not be very welcomed (as usual). Especially during uncertain times in the market like now, this kind of economic data usually has an increased impact. A high number would likely move the bond yields back up which is the opposite of what the administration is seemingly trying to achieve currently. Then there’s also FOMC next week and the Fed will definitely be looking at this CPI print as well,” analyst Daan Crypto Trades remarked.https://x.com/DaanCrypto/status/1899792500606329168

Meanwhile, this CPI data comes after a good JOLTS report on Tuesday, which gave the market a reason to stop falling. Notably, Fed Chair Jerome Powell stated on Friday that the US central bank would take a cautious approach to monetary policy easing, adding that the economy currently “continues to be in a good place”.

Lockridge Okoth is a Journalist at BeInCrypto, focusing on prominent industry companies such as Coinbase, Binance, and Tether. He covers a wide range of topics, including regulatory developments in decentralized finance (DeFi), decentralized physical infrastructure networks (DePIN), real-world assets (RWA), GameFi, and cryptocurrencies. Previously, Lockridge conducted market analysis and technical assessments of digital assets, including Bitcoin and altcoins such as Arbitrum, Polkadot, and...