Bitcoin's price continues to hover below $107,000 amidst significant economic events and expectations around rate changes.
U.S. Inflation Figures
With the opening of the SP500 market, a new all-time high was reached. However, as often the case, BTC is not following the stock market’s upward trend or probably on the verge of a substantial breakthrough. Today, with $15 billion in options set to expire, movements around $107,000 were anticipated, but significant shifts could occur over the weekend.
The PCE data is a key inflation indicator monitored by the Fed, and the annual rate is diverging from the institution’s expectations. Excluding food and energy, core PCE experienced a monthly and yearly increase of 0.2% and 2.7%, respectively. Notably, personal consumption expenditures indicated a weakness, which was unexpected and personal incomes also fell against growth forecasts.
Prospects for Fed Rate Changes
Three Fed members indicated a potential rate cut in July unless a significant inflation increase occurs. Waller, one of these members, emphasized that poor job creation data is a crucial employment signal, suggesting an imperative rate cut in July. Therefore, the Fed is moving away from unanimous decisions and towards majority-based resolutions.
Market predictions suggest three rate cuts might occur before the year’s end, with a 90% chance of a September cut. Additionally, Trump and the Commerce Secretary announced nearing the final stages of tariff agreements with several countries.
Upcoming Agreements and Market Impact
As July 9 approaches, with only 33 days remaining until the Fed’s rate decision, the nature of agreements announced by countries will significantly shape markets. If tariff agreements resolve uncertainty and maintain reasonable rates, the Fed might initiate swift rate cuts, assuming minimal inflation impact. The EU is currently evaluating the U.S.’s recent offer and is preparing a counter-strategy to strengthen its position.
The anticipation of significant economic decisions and inflation data creates market uncertainty; attention to events that unfold in the coming week has heightened.
