The Dow Jones Industrial Average gained 1% on Thursday, following comments by Atlanta Federal Reserve President Raphael Bostic, who ruled out aggressive Fed rate increases and suggested a pause on hikes by the summer. This eased concerns that the Fed could be forced to implement more aggressive rate hikes following strong economic data. Data showing a rise in labor costs in the fourth quarter and fewer initial jobless claims pushed Treasury yields to levels not seen in over a decade. Wells Fargo pushed back its call on recession and expects an economic downturn in H2 2023, and interest rates to remain higher for longer. Financials were the biggest drag on the market, with regional banks leading to the downside despite surging yields.
The outlook for the crypto industry remains hazy as several major cryptocurrency firms, including Coinbase, Paxos, Gemini, BitStamp, Crypto.com, Galaxy Digital, and Circle, have distanced themselves from Silvergate, a bank that was once a crucial partner linking them to the traditional banking system. This move follows Silvergate’s announcement that it would report further losses and delay its annual report, which casts doubt on its ability to continue as a going concern over the next 12 months. The distancing adds another business challenge for Silvergate, and its shares were down as much as 56% in afternoon trade on Thursday.
Core consumer inflation in Tokyo, Japan slowed in February due to government energy subsidies, while a separate index excluding fuel hit a fresh three-decade high, indicating inflationary pressure. Japan’s jobless rate fell to a three-year low of 2.4% in January, signaling labor shortages that will encourage companies to increase wages and ease the burden on households from rising living costs. The data challenges the Bank of Japan’s view that cost-driven inflation will be temporary and increases pressure on the central bank to phase out its massive monetary stimulus. The Tokyo core consumer price index rose 3.3% YoY in February, slowing from a 42-year high of 4.3% in January. However, it exceeded the BOJ’s 2% target for nine consecutive months.