What to know:

Inflation in the U.S. softened more than expected in February, putting Federal Reserve rate cuts firmly back in the plan as spring and summer approach.

The Consumer Price Index rose 0.2% in February, according to a report from the Bureau of Labor Statistics on Wednesday morning. Expectations were for 0.3% and January's pace was 0.5%. On a year-over-year basis, headline CPI was higher by 2.8% versus forecasts for 2.9% and January's 3.0%.

Core CPI, which excludes food and energy costs, increased 0.2% in February against forecasts for 0.3% and January's 0.4%. On a year-over-year basis, core CPI was running 3.1% versus expectations for 3.2% and January's 3.3%.

The price of bitcoin (BTC) rose more than 1% to $84,100 in the minutes following the data. Checking traditional markets, Nasdaq 100 futures added to an earlier advance, now higher by 1.5%. Bonds, the dollar and gold remained little-changed.

It's been a rough few weeks for markets, crypto among them, as previously perky prices were punctured by tariff-induced economic slowdown fears. Adding to those concerns, inflation has remained stubbornly well north of the Fed's 2% target, calling into question whether the central bank could even ease policy to combat any sluggishness. After another down day yesterday, the S&P 500 was lower by about 10% over the past month. Bitcoin at one point earlier this week had tumbled roughly 30% from its record high of $109,000 touched just prior to President Trump's Jan. 20 inauguration.

Prior to today's report, interest rate traders had priced in about a 40% chance of a May Fed rate cut and an 85% chance of one or more rate cuts by the June meeting.

Looking ahead, Thursday’s Producer Price Index (PPI) report could either continue to confirm or refute the news rom today, providing further insight into the direction of inflation and potential Fed rate cuts.