Wednesday's Markets Update (April 12, 2023)

13 Apr 2023 by rate3

On Wednesday, we saw how the FOMC's shortsightedness overpowered reality. Despite the BLS reporting that March's CPI increased 0.1 percent, decelerating from a 0.4 percent rise in February and below the market's expectations of a 0.2 percent gain, traders focused instead on the Fed's stubbornly hawkish rhetoric. As a result, the NASDAQ went down 1.5 percent (opening: 12110, closing: 11929), while BTC decreased 1.2 percent (opening: 30157, closing: 29798), only to recover back over 30K after hours.

The confusion among players regarding the Fed's policies is even more apparent when taking into account that the index for shelter was the significant contributor to the recent decline (0.6 percent vs. 0.8 percent in February) added by a sharp decline in energy (-3.5 percent vs. -0.6 percent). Previously, Powell mentioned rising prices for rented apartments among his main concerns.