Wall Street Today | Lyft Lifts After Earnings Error, Market Rebounds From CPI

Stocks rose Wednesday, one day after hotter-than-expected inflation data Tuesday dashed hopes that the Federal Reserve will soon pivot to cutting U.S. interest rates.

Federal Reserve Chair Michael Barr said the FOMC would need more data before lowering interest rates, speaking on Wednesday. He said he supported Powell's remarks to wait longer before lowering.

“As Chair Powell indicated in his most recent press conference, my FOMC colleagues and I are confident we are on a path to 2% inflation, but we need to see continued good data before we can begin reducing the federal funds rate,” Bar said.

Barr also repeated his long-standing view that the US banking sector is safe, despite a shocking revelation from New York Community Bank that their loan book was unhealthy. He said “no signs of liquidity problems across the system.”

“A single bank missing its revenue expectations and increasing its provisioning does not change the fact that the overall banking system is strong,” said Barr, adding that the Fed is monitoring the sector for risks carefully.

Interest Rates Have Bottomed Due to Surging Government Spending, Gundlach Says

That's Jeffrey Gundlach, the DoubleLine CEO speaking to CNBC, on how the next cutting cycle from the Fed may lead to a different experience for the broader economy.

Gundlach is not alone in warning about government spending, which Fed Chair Jerome Powell called unsustainable. The Congressional Budget Office forecasts federal budget deficits will total $20 trillion over the 2025-2034 period, and it's unusual to see big deficit-to-GDP ratios, such as 6% last year, when the economy is expanding.

Gundlach said it's "not implausible" that longer-term interest rates could go into the "high single digits." He noted in the 1980s that real interest rates - adjusted for inflation - reached 10%.

U.S. crude oil inventories rose sharply last week as refineries reduced their capacity use, according to data released Wednesday by the U.S. Energy Information Administration.

Commercial crude oil stocks excluding the Strategic Petroleum Reserve, rose by 12 million barrels to 439.4 million barrels in the week ended Feb. 9 and were about 2% below the five-year average for the time of year, the EIA said.

Analysts surveyed by The Wall Street Journal had predicted crude stockpiles would rise by 2.8 million barrels.

BTC rallied as much as 5.5% to as high as $52,079, sending crypto stocks rising as well.

As Bitcoin passed the $51,000 price point Wednesday, it reclaimed $1 trillion in market capitalization, a level not seen since 2021.