Tuesday's Markets Update (March 7, 2023)

07 Mar 2023 by rate3

Powell's testimony to Congress on Tuesday did not bring relief to markets, as expected. Basically, he said that the pace of rate hikes (currently at 4.5%-4.75%) might be accelerated if needed, that the latest economic data has come in stronger than the Fed previously anticipated, that he still keeps his target at 2%, and that it will take some time to reach that goal. Not necessarily big news. :)

At the same time, another piece of data released on March 7 suggests that, despite the macroeconomic negativity, consumers remain unreasonably buoyant. The IBD/TIPP Economic Optimism Index rose to 46.9 in March from 45.1 in the previous month, the highest since December 2021. However, the index remains in pessimistic territory for a 19th straight month, with 53 percent of respondents believing that the economy is in a recession (compared to 55% in January and 61% in October).

The NASDAQ acted accordingly, sliding from 11670 at the opening to 11530 at the close (-1.2 percent), with BTC returning to a downward trend and declining from 22363 to 22054 (-1.4).