US February CPI Meets Expectations at 2.4% as Bitcoin Rallies Toward $71,000

February CPI: No Surprises on Inflation Front

The US Consumer Price Index (CPI) for February held steady at 2.4% year-over-year, matching analyst expectations precisely. Bitcoin responded with a 2.3% jump, reaching the $71,000 level.

BTC/USDT hourly chart on Binance. Source: TradingView

Ethereum also posted gains, climbing 2.8% to approach the $2,100 mark.

ETH/USDT hourly chart on Binance. Source: TradingView

Core CPI — which strips out volatile food and energy components — rose 0.2% month-over-month, slightly below January's 0.3%. On an annual basis, core inflation came in at 2.5%, matching both the consensus forecast and the previous month's reading.

Why This Matters

While the in-line CPI print reduces immediate market uncertainty, experts surveyed by Bloomberg caution that February's data does not yet reflect the impact of the war in Iran, which has already driven energy and fuel prices sharply higher.

Analysts flag concerning signals from the PCE index — another key inflation gauge favored by the Federal Reserve. Its core components for the prior month point to a minimum 0.4% increase, deviating from the Fed's 2% annual target even before accounting for Middle East conflict effects.

Expert Opinions and Scenarios

Bloomberg economists Anna Wong and Troy Duri suggested that rising energy costs could push the March CPI to approximately 3%.

Karen Manna, Chief Investment Officer at Federated Hermes, described the current statistics as "background noise," arguing that risk asset pricing is now being driven by the geopolitical situation around Iran rather than economic reports.

Christopher Hodge of Natixis identified the energy shock's economic impact as the central question, outlining two possible scenarios:

• Scenario 1: Higher energy costs act as a "consumption tax." Rising gasoline and heating expenses squeeze household budgets, demand falls, and inflation begins to decline.
• Scenario 2: Expensive energy entrenches inflation expectations. Consumers adapt to higher prices and begin demanding higher wages, embedding inflation for an extended period.

Hodge believes the Fed will bet on the first scenario but warned that time will tell whether the pass-through from temporary factors (oil prices) into core metrics and expectations accelerates this time around.

Fed Rate Outlook

Markets interpreted the CPI data as confirmation that the Fed's easing cycle remains on pause. The probability of holding rates at the March 18 meeting stands at 99%, while odds of an April cut dropped to just 11%.

Fed rate change probabilities. Source: CME FedWatch

Wong and Duri expect moderate unemployment growth and slowing core inflation in the second half of the year, which would give the Fed room to maneuver. The economists project 100 basis points of rate cuts by year-end.

Broader Market Reaction

US stock index futures showed mixed results. Nasdaq dipped 0.04%, Dow Jones fell 0.07%, while the S&P 500 edged up 0.07%. The 10-year Treasury yield rose to 4.18%.

Oil markets continued their rally amid the Middle East conflict — crude prices have surged 80% over the past three weeks. WTI gained 2.2% in the last 24 hours, with Brent up 2.1%. Due to supply disruptions through the Strait of Hormuz, the International Energy Agency announced the release of 400 million barrels from strategic reserves to help stabilize the market.

Bitfinex analysts have previously identified oil prices as the primary driver of Bitcoin's price action in the current environment.