Recaps · US CPI · 13 Feb 2024, 13:30 UK

A bad day, then a better one

January's inflation was hotter than forecast, and the Dow had its biggest one-day fall in almost eleven months. Bitcoin fell slowly all afternoon. A day later it was well above where it started, because the new ETFs kept buying.

Release: Tuesday 13 February 2024, 13:30 UK
Headline CPI: +0.3% m/m, 3.1% y/y (forecast 2.9%)
Core CPI: +0.4% m/m, 3.9% y/y (forecast 3.7%)
Driver: Shelter, over two-thirds of the rise (BLS, via CNBC)
Bitcoin at release: $49,788

The report

CNBC reported that economists had expected 0.2% on the month and 2.9% on the year. The actual numbers were 0.3% and 3.1%, and core prices rose 0.4% against a 0.3% forecast. Shelter costs rose 0.6% in the month. Reuters wrote that the report pushed back expectations of an early Fed cut. The Dow fell 1.35%, its biggest percentage drop in almost eleven months.

A slide without a big candle

1 14:15 UK: about 1% down
2 17:10 UK: low, about 2.9% down

Bitcoin, 5-minute candles, % from the 13:30 UK price. Source: Bitstamp.

There was no sharp drop. Bitcoin was -0.26% after five minutes and -1.68% after an hour, #23 of 117 CPI releases at 3.2 times a normal hour. It kept falling to about 2.9% down at 17:10 UK. The Nasdaq-100 ETF was +0.7% at the hour in our data, measured from the 14:30 UK open, so it misses the fall in futures before the open.

Change four hours after the release, in %.

The next day

On 14 February Bitcoin rose above $51,000 for the first time since December 2021 and its market value passed $1 trillion again, CNBC reported. CoinShares told CNBC that the ETFs had taken in $651 million on the day of the CPI release, the largest daily inflow since launch day. In our data Bitcoin was +3.8% a day after the release.

The lesson is about which flows were in charge. In early 2024 steady ETF buying was a bigger force than one month's inflation data. A hot print could knock the price down for an afternoon but not reverse the trend. Compare the April 2024 report, also hot: Bitcoin fell 1.9% in the first hour but was back to flat at four hours. Bitcoin was +5.0% a week after this release, and Ether +11%.

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.