Replays · US CPI · 13 Sep 2022, 13:30 UK
Core at 0.6%: the morning the inflation-peak trade unwound
Four weeks earlier, a flat July CPI had sent Bitcoin up 4.6% in an hour and convinced many traders that inflation was turning. On Tuesday 13 September 2022 the August report reversed that. Headline prices rose just 0.1%, but core prices rose 0.6%, double the previous month. Bitcoin's first-hour fall of 5.96% is the largest reaction to a CPI release in our data, measured against a normal hour.
- 1 13:30 UK: the release
Two releases, opposite ways
The chart puts the two summer releases side by side. In August the line rose and held. In September it did the reverse: a 3.4% drop in the first five minutes, then a slide that never paused for a meaningful bounce. Bitcoin was down 8.8% after four hours and 11% after 24 hours. Shocks often fade, as traders take profit or decide the first move went too far. This one kept going.
Where the surprise came from
The headline figures looked fine. Annual inflation eased from 8.5% to 8.3%, and the monthly change was barely positive because petrol prices had fallen sharply. Underneath, core prices rose 0.6% in the month, the fastest since June's 0.7%, and core inflation over the year rose from 5.9% to 6.3%. Shelter, medical care and other services were doing the work. For a central bank that had said it wanted to see core inflation clearly turning, that was the wrong direction.
Bond traders priced that quickly. The two-year Treasury yield closed at 3.75%, up from 3.58% the day before. A week later the Fed raised rates by 75 basis points for the third meeting in a row.
- Headline CPI, m/m
- +0.1%
- Core CPI, m/m
- +0.6%
- Core, prior month
- +0.3%
- 2-year yield, day change
- +17bp
- 1 13:30 UK: CPI released. The first candle falls from $22,727 to $21,947.
The five-minute candles show the shape. The first bar fell from $22,727 to $21,947, and after that the price drifted lower for the rest of the afternoon, with only small bounces. There was no second moment of panic, just steady selling. That pattern usually means investors are repositioning rather than reacting to a headline.
| Market | 5m | 1h | 4h | 24h | × normal hour |
|---|---|---|---|---|---|
| Bitcoin | −3.43% | −5.96% | −8.77% | −11.04% | 12.8× |
| Ethereum | −3.79% | −8.12% | −9.23% | −9.11% | 13.8× |
| Solana | −4.81% | −8.17% | −10.15% | −14.32% | 14.5× |
| XRP | −1.98% | −4.37% | −5.12% | −6.35% | 6.2× |
| Litecoin | −0.30% | −4.31% | −6.09% | −10.60% | 6.1× |
| Chainlink | −3.79% | −7.70% | −9.09% | −8.59% | 10.8× |
| Cardano | −4.78% | −6.11% | −7.12% | −7.39% | 11.1× |
Crypto change from the 13:30 UK open. SPY and QQQ are left out because IEX data starts at the 14:30 UK cash open.
Why this one tops the list
Ether fell 8.1% in the hour, also its biggest CPI reaction on record. That came just two days before Ethereum's Merge upgrade, a moment many holders had expected to support the price. A month that started with talk of an inflation peak ended with another 75 basis point hike. September 2022 is a useful reminder that the headline number is not the whole report, and that the market reads the detail within minutes.
Sources: release time and figures from the U.S. Bureau of Labor Statistics (public domain), first-print values via ALFRED, Federal Reserve Bank of St. Louis. Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.