Bitcoin (BTC) fell below $73,000 on March 18 after the U.S. Bureau of Labor Statistics reported February Producer Price Index data that far exceeded Wall Street estimates.
The sell-off added to an already cautious mood in crypto markets, with traders bracing for the Federal Reserve’s rate decision scheduled later in the day.
Wholesale Inflation Runs Hotter Than Expected
February headline PPI rose 0.7% month over month, more than doubling the 0.3% consensus forecast. On an annual basis, wholesale prices climbed 3.4%, well above the expected 3.0% reading and the highest level since February 2025.
Core PPI, which strips out volatile food and energy costs, painted a similarly stubborn picture. The measure gained 0.5% monthly against a 0.3% estimate and rose 3.9% year over year, topping the 3.7% projection. Goods prices led the surge, with a 1.1% monthly increase driven by food and energy costs.
The data follows a relatively tame February Consumer Price Index print of 2.4% year over year, which had briefly lifted risk sentiment. However, the PPI overshoot suggests that upstream price pressures have not yet filtered through to consumer-facing metrics and could push future CPI readings higher.
Could Red-Hot PPI Just Derail the Fed’s Rate Cut Narrative?
The timing of the release carries added weight. The Federal Open Market Committee (FOMC) wraps up its two-day meeting today, with the policy statement due at 2 p.m. ET and Chair Jerome Powell’s press conference at 2:30 p.m.
CME FedWatch data showed a 99% probability of a rate hold at 3.50%-3.75% heading into the meeting.
The hot PPI print reinforces that expectation and could narrow the window for any easing later in 2026.
Market participants will focus on the updated Summary of Economic Projections and the dot plot. A shift from one projected rate cut in 2026 to zero would likely extend the sell-off in risk assets, while a surprise move toward two cuts could offer relief.
BTC traded around $72,509 at the time of writing, after slipping sharply below the $73,000 threshold.
