BTC is up! The US inflation rate reached 2.8% in February, and the CPI is lower than market expectations.

The inflation data for February was lower than expected, and the rate of increase slowed down

The Bureau of Labor Statistics (BLS) in the United States released the latest inflation data on Wednesday, showing that the Consumer Price Index (CPI) rose by 0.2% on a monthly basis in February, lower than market expectations, bringing the annual growth rate to 2.8%. This data indicates a slight slowdown in the inflation rate, which is 0.1 percentage point lower than the market's expected 2.9%.

Core CPI (core index excluding food and energy prices) also rose by 0.2%, with an annual growth rate of 3.1%, lower than the market's forecast of 3.2%.

Tariff policies affect market confidence, and inflationary pressures weaken

Economists believe that one of the reasons for the lower-than-expected inflation data may be related to market concerns about the potential impact of tariffs. As the government discusses imposing additional tariffs on imported goods, businesses and consumers are cautious about future price trends, which may prompt businesses to slow down price adjustments to adapt to the uncertain market environment.

Market reaction: Stock market optimistic, bond market divergent

After the data was released, the US stock market futures maintained a positive trend, indicating investors' optimistic view on easing inflation. However, US bond yields showed a divergent trend, with little change in short-term interest rates and a slight decrease in long-term interest rates, reflecting different interpretations of economic growth and monetary policy in the market.

Inflation Trends and Federal Reserve Policy Outlook

As inflation slows down, the market begins to focus on whether the Federal Reserve (Fed) will adjust its monetary policy within this year. The Fed has previously stated that it needs to see inflation stabilize and fall back to the 2% target before considering a rate cut. Although this data is lower than expected, core inflation remains high at 3.1%, indicating that price pressures have not completely subsided.

Next, the market will closely monitor the upcoming employment data and the remarks of Federal Reserve policymakers to judge the future direction of monetary policy. If future data shows further easing of inflation, the Fed may consider rate cuts within the year, further affecting market trends.

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