US Close – Fed’s dovish hike trumped by Yellen not considering broad increase in deposit insurance, Oil rallies, Gold gets groove back, Bitcoin softens

Wall Street’s initial take on the Fed was that they delivered a dovish hike and that banking turmoil will finish the job of bringing inflation back to target.  Fed Chair Powell started the press conference by noting that the banking system is sound, but Treasury Secretary Yellen put a wrench in that idea.  Yellen noted that regulators are not considering a broad increase in deposit insurance.  Yellen said she is not considering a broad increase in deposit insurance despite all the discussion around blanket deposit insurance.  It sounds like we are nowhere near having a debate on whether to raise FDIC limit above $250,000. 

Stocks were initially rallying on optimism that the Fed is done with raising rates, but Yellen’s comment on deposit insurance unnerved investors as the banking turmoil will not be going away anytime soon.

The Fed

The FOMC decision went mostly as expected, policymakers unanimously agreed to raise rates by 25 bps and the forecasts showed growth weakened as inflation and the unemployment outlook both rose.  If the Fed met earlier in the week, policymakers might have opted for a hold.  The Fed is confident that banking stress is being handled accordingly, but a tremendous amount of uncertainty persists and that could justify rate cut expectations later this year.    

No one believed Powell’s comment that “If we need to raise rates higher we will.” The outlook is not looking good as credit is tightening, banks are going to be hesitant to lend, and banking stress won’t be easily solved. 


Crude prices are rallying as the end of the Fed’s tightening cycle is likely here and as oil exports surged to a record high, alleviating global growth slowdown concerns.  The oil market was oversold and now we are starting to get some signs that demand is stabilizing. 

March mayhem with WTI crude appears to be over and now price appears poised to recapture the $70 level.  The EIA crude oil inventory was a tad bullish as demand across crude oil, gasoline, and distillates rebounded.  US stockpiles are now at the highest since May 2021 after a small inventory rise of 1.12 million, which was more than the expected draw of 1.5 million.  US crude production rose by 100,000 bpd to 12.3 million barrels per day, a post-pandemic high. 


Gold is rallying after investors got rattled by Treasury Secretary Yellen’s comment that she is not considering a broad increase in deposit insurance and on rising Fed rate cut bets for later this year.  Wall Street will have to deal with further banking turmoil and that should keep safe-haven flows coming to gold.  Credit conditions are tightening and more parts of the economy are about to break and that should spell trouble for stocks. Gold’s on a mission to recapture the $2000 level and shortly after that a possible run to record territory.


Risk aversion was able to drag down Bitcoin as market jitters returned on banking worries and over a quickly weakening economy. The Fed might be done tightening, but the risk of something else breaking in the financial sector remains elevated.   

A crackdown on Crypto influencers was widely expected and appears to finally be here.  While the violations against Lindsay Lohan, Soulja Boy and Jake Paul won’t draw serious attention, the alleged fraud and unregistered securities by Tron found Justin Sun is newsworthy. Market manipulation is one part of the crypto world that still has yet to be cleaned up or even close to fully being addressed.   

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.