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The US Consumer Price Index (CPI) rose by 0.1% in March 2023, which was slower than economists’ expectations of 0.2%. The CPI was higher by 5% YoY, down from 6% in February, and against expectations for 5.2%. Meanwhile, the core CPI, which strips out volatile food and energy prices, was up 0.4% in March compared to 0.5% in February, in line with forecasts for 0.4%, and up 5.6% YoY.

Bitcoin’s price rose almost 1.5% to $30,430 following the news, after having topped $30,000 for the first time since June 2022 earlier this week. The recent surge in the price of Bitcoin has been partly driven by speculation that the US Federal Reserve may soon end its year-plus string of interest rate hikes. The soft inflation figures may fuel those dovish hopes.

While Bitcoin gained after the report, US stock index futures also turned higher, with the Nasdaq up 1.1% and S&P 500 up 0.9%. The price of gold also advanced, up 1.1% to $2,042 per ounce. However, bond yields and the US dollar slid, with the 10-year US Treasury yield lower by 5 basis points to 3.38% and the US dollar index down 0.6%.

The CPI figures for March came as a surprise to many, as initial expectations were for a decline in inflation rates to 5.2%. The increase in CPI and core CPI could have immediate effects on Bitcoin’s price performance, as the inflation numbers determine the monetary policy undertaken by the US Federal Reserve and whether it will continue spiking the key interest rates.

The declining inflation YoY shows that the Fed’s actions have an effect, and the central bank could start reversing its strategy soon. This could have far-reaching consequences for Bitcoin and other markets.