The U.S. Bureau of Labor Statistics accidentally released critical inflation data for April 30 minutes early on Wednesday.
Yet, in a twist fit for a financial thriller, the sleeping investors failed to capitalize on this advance peek, missing out on what could have been a golden opportunity to gain from trading.
On a day when microseconds can mean huge returns, the early availability of Consumer Price Index (CPI) figures should have set off a frenzy of buying and selling.
The CPI data, meticulously watched by traders, highly influences global asset prices and Federal Reserve policy. Under normal circumstances, these figures are unveiled with extreme precision at 8:30 a.m. Washington time, surrounded by high security to prevent leaks.
However, this Wednesday was different. “In advance of today's CPI and Real Earnings releases, BLS inadvertently loaded a subset of files to the website approximately 30 minutes prior to the release,” the Bureau admitted in a post-incident statement.
Yet the market remained oddly still, with no significant movements detected during the premature window.
Inflation Data Pushed Stocks To Record Highs, Bitcoin’s Strongest Day In Two Months
It wasn’t until the scheduled release time that the markets woke up. U.S. stock-index futures surged, and Treasury yields dipped as the official data hit the news.
Major indices including the S&P 500, Nasdaq 100, and Dow Jones Industrial Average rocketed to record highs, closing the day up 1.2%, 1.5%, and 0.9%, respectively.
The inflation data, aligning closely with forecasts, prompted traders to raise their Fed rate cut expectations, triggering a drop in Treasury yields and a rally in rate-sensitive sectors like technology and real estate.
The Real Estate Select Sector SPDR Fund XLRE soared 1.7%, on track to mark its strongest week since December 2023.
Long-dated Treasury bonds, as tracked by the iShares 20+ Year Treasury Bond ETF TLT, rose 1.4%.
Meanwhile, the more speculative cryptocurrency market responded dramatically post-release, with Bitcoin BTC/USD rocketing 7.6% in its best daily performance in nearly two months.
As illustrated in the chart below, the majority of the day’s gains occurred after 8:30 a.m. EDT, suggesting that traders were unaware of the early data release on the BLS website.
Chart: Bitcoin Skyrocketed Only After Inflation Data Hit the News
Previous Incidents And Scrutiny
This incident has reignited scrutiny over the BLS’s data practices.
Bloomberg News recently uncovered communications between a BLS economist and major Wall Street firms, including JPMorgan Chase & Co. JPM and BlackRock Inc. BLK, about key inflation figures, sparking concerns over equitable data access.
And a sudden rally in Treasuries futures seconds before favorable inflation data in December 2022 raised alarms about potential leaks or hacks. No evidence of wrongdoing was found.
Regarding this week’s incident, the BLS has responded by notifying the Office of Management and Budget and the Labor Department's Inspector General. It promises a “full investigation into its procedures and controls to ensure the incident is not repeated.”
Now Read: Jamie Dimon Sounds Alarm On Ballooning US Fiscal Deficit: ‘It Will Cause A Problem’
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