Recaps · US CPI · 12 Feb 2025, 13:30 UK

Hot, then forgiven

Every number in the January 2025 report was above forecast. Bitcoin dropped hard in the first ten minutes and altcoins fell further. By early evening Bitcoin was above its release price. Powell testified to Congress the same day and urged caution about reading too much into one report.

Release: Wednesday 12 February 2025, 13:30 UK
Headline CPI: +0.5% m/m, 3.0% y/y (forecast 0.3%, 2.9%)
Core CPI: +0.4% m/m, 3.3% y/y (forecast 0.3%, 3.1%)
Same day: Powell before the House Financial Services Committee
Bitcoin at release: $96,495

The report

CNBC reported that prices rose 0.5% in January against a 0.3% forecast, taking the annual rate to 3.0%. Core prices rose 0.4% and 3.3%, also above estimates. Reuters wrote that it was the biggest monthly rise in nearly a year and a half. Markets pushed back the expected timing of the next Fed cut.

Later that day Powell appeared before the House Financial Services Committee. "We don't get excited about one or two good readings and we don't get excited about one or two bad readings," he said, according to CNBC.

Down fast, back slowly

1 13:40 UK: low, about 2.5% down
2 17:25 UK: about 1% up

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

Bitcoin fell -1.64% on the release candle and reached its low, about 2.5% down, at 13:40 UK. Crypto Briefing put the low at $94,081. It was still -1.88% after an hour, #18 of 117 CPI releases at 3.5 times a normal hour, then recovered steadily and was +1.09% at 17:30 UK. Stocks recovered too: Reuters reported the S&P 500 down only 0.27% at the close and the Nasdaq flat.

First-hour change after the release, in %.

What the recovery says

Altcoins fell about twice as far as Bitcoin in the first hour: Cardano -4.8%, Solana -4.3%. That is the usual order on a risk-off surprise. The recovery suggests the market judged one hot month as noise, much as Powell had advised. Bitcoin was -0.6% a day later.

For comparison, the previous month's report was soft on core and Bitcoin rose 1.6% in its first hour. A trader could note that, in early 2025, a hot print produced a sharp but short drop rather than a trend change. Solana was the exception, -13% over the week.

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.