Stocks and bonds were whipsawing on Wall Street after hotter-than-expected inflation data tempered bets on a Federal Reserve rate cut in March.

The prevailing view on trading floors is that the consumer price index was not great, but it did not change expectations for the Fed's course. In other words, investors are mostly convinced that officials are done raising interest rates and will ease policy in 2024, even if this occurs a little later than markets anticipate.

The S&P 500 fluctuated between gains and losses. US 10-year yields were hovering around 4%. Fed swaps have less monetary easing priced in for 2024. Bitcoin has pared gains after reaching $49,000, and trading for the first US exchange-traded funds that invest directly in the cryptocurrency has begun. After Iran seized a tanker in the Gulf of Oman, oil prices rose.

Mester, President of the Federal Reserve Bank of Cleveland, believes that lowering interest rates in March is probably premature. Her Richmond counterpart, Barkin, reiterated that he is still looking for more evidence that inflation is heading in the right direction.