Bitcoin price was trading sideways after hitting highs of $22,300, with major US indexes also down. The markets’ reaction comes after hotter-than-expected inflation data for the first month of 2023. US CPI rose 0.5% over the month and 6.5% year-over-year.
Bitcoin was holding just above $22,000 at around 11:00 am ET, with the flagship cryptocurrency having swung from highs of $22,300 as the broader crypto market mirrored Wall Street following Tuesday’s US inflation data.
Across crypto, Ethereum first ticked closer to $1,570 across major exchanges, rising as much as 5% before the upside cooled to see ETH trade near $1,540 at the time of writing. A similar picture held for Binance Coin, with BNB nearing $300 with about 3.5% in gains before shedding some of the gains.
The action across US stocks also had the major indexes in the green premarket, before broader reaction to consumer price data released on Tuesday saw the major indexes trade lower.
The S&P 500 rose nearly 0.7% but had flipped negative after the latest Consumer Price Index (CPI) data from the US Bureau of Labor Statistics showed inflation picked up over the past one month after consecutive months of declines. The S&P 500 was down 0.6% at the time of this report.
The outlook was similar for the Dow Jones Industrial Average and the Nasdaq Composite, which were down about 0.8% and 0.6% respectively.
Markets react to January CPI data
On Tuesday morning, the US government’s data on inflation showed consumer prices rose 0.5% in January and 6.4% over the past twelve months, higher than the forecast 6.2%.
Even for the Core CPI, which leaves out the more volatile food and energy components, the readings were 0.4% in January and 5.6% year-over-year.
The data thus showed inflation had picked up in the first month of 2023, coming in hotter than economists expected, with Wall Street reacting lower on the news as investors weigh what this means for the Fed’s interest rates path. Market observers say this could point to a higher for longer path that the Fed has previously pointed out.
Tim Seymour, the CIO of Seymour Asset Management certainly thinks this could be on the cards now.
#CPI – biggest impact form today is that rates are adjusting in Feb-April’24 more than anywhere on the curve… (HIGHER for LONGER)
— Tim Seymour (@timseymour) February 14, 2023
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