Replays · US CPI · 10 Apr 2024, 13:30 UK

Three months of 0.4%, and a market that shrugged

Early 2024 was meant to be the year inflation cooled enough for rate cuts. Instead, core prices rose 0.4% for the third report in a row. Crypto sold off at 13:30 UK and spent the afternoon buying it back.

US core CPI, % change from the month before, first prints (ALFRED), by reference month.

The number

Headline inflation rose from 3.2% to 3.5% a year. Core CPI rose 0.4% in March, after 0.4% in January and February as first reported. At that pace, core inflation runs at almost 5% a year, more than double the Fed's 2% target.

Down, then back

1 14:50 UK: Bitcoin's low, about 2.1% down
2 17:25 UK: back near the release price

Bitcoin, Ether and Dogecoin over the four hours after the release, % from the 13:30 UK price.

Bitcoin was $68,947 at the release and was -1.86% after an hour. That ranks #14 of 117 CPI releases in our data, at 4.0 times a normal hour. The low came at 14:50 UK. After that the selling stopped, and by four hours Bitcoin was -0.04%, almost exactly where it started. CoinDesk reported that it was back above $70,000 later that day.

Dogecoin had the strongest recovery. It was -1.9% after an hour and +3.5% at four hours. US stocks took little notice in the first hours: the S&P 500 ETF was +0.25% after an hour.

Bitcoin's first-hour move after every CPI release in our data, by size. This release is highlighted.

The pound took the report harder than crypto did. Sterling was -1.04% against the dollar at the London 4pm fix, a big move for a currency that usually shifts a few tenths of a percent on a US release. In crypto, the selling was spread evenly: every coin in our set was between 1.6% and 2.5% down at the hour, which suggests broad selling rather than news about any single coin. The recovery in the third and fourth hours was just as broad.

The week

The one-week numbers are much worse: Bitcoin -9.4%, Chainlink -24% and Cardano -23%. Most of that came on Saturday 13 April, when Iran launched a drone and missile attack on Israel and crypto, trading through the weekend, sold off sharply. Bitcoin's fourth halving came on 20 April, just after the window closed. The attack had nothing to do with US inflation, but it sits inside the one-week window.

This replay shows that a release can rank high on its first hour and leave almost nothing at four hours.

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.