- Bitcoin price traded sideways after reaching as high as $22,300, with major US indices also lower.
- The markets’ reaction comes after higher-than-expected inflation data for the first month of 2023.
- The US Consumer Price Index increased by 0.5% during the month and 6.5% on an annual basis.
Bitcoin was holding just under $22,000 at around 11:00 AM ET, with the major cryptocurrency turning back from highs of $22,300 as the broader crypto market reversed Wall Street after US inflation data on Tuesday.
Across the cryptocurrency, Ethereum first approached $1,570 across major exchanges, surging 5% before the upside cooled to see ETH trading near $1,540 at the time of writing. Similar picture for Binance Coin, with BNB nearing $300 with a 3.5% gain before shedding some of the gains.
The movement across US stocks also had the major indices in the green, before the broader reaction to consumer price data released on Tuesday sent the major indices lower.
The S&P 500 rose about 0.7% but reversed negatively after the latest Consumer Price Index (CPI) data from the US Bureau of Labor Statistics showed inflation rising over the past month after consecutive months of declines. The S&P 500 is down 0.6% at the time of this report.
The outlook was similar for the Dow Jones Industrial Average and the Nasdaq Composite, which fell about 0.8% and 0.6%, respectively.
Markets are reacting to January CPI data
On Tuesday morning, US government data on inflation showed consumer prices rose 0.5% in January and 6.4% over the past 12 months, above expectations of 6.2%.
Even for the core CPI, which excludes the more volatile food and energy components, the readings were 0.4% in January and 5.6% year over year.
The data thus showed that inflation rebounded in the first month of 2023, becoming hotter than economists expected, with Wall Street responding less to the news as investors weigh what this means for the Fed’s interest rate path. Market watchers say this could point to a longer, higher path that the Fed indicated earlier.
Sure enough, Tim Seymour, CIO of Seymour Asset Management Believes This could be on the cards now.
#CPI – The biggest form of impact today is the price adjustment in Feb-Apr 24 than anywhere else on the curve… (high for longer)
– Tim Seymour (@timseymour) February 14, 2023