This week, crypto markets may witness significant shifts as three key economic updates in the US could affect the Federal Reserve's actions and Bitcoin's dynamics.
Retail Sales Dip and Its Consequences
Retail sales data is expected this week, and economists are not overly optimistic. A 0.6% decrease from April to May is anticipated, indicating that U.S. consumer spending may be weakening. Since consumer spending drives about 70% of the economy, this could strengthen the case for the Fed to cut rates sooner. Thus, a drop in sales could increase the chances of rate cuts, which in turn could have a positive impact on Bitcoin's price.
Rising Jobless Claims as a Signal
Also on the agenda is the initial jobless claims report, moved to Wednesday due to the holiday. Economists expect a rise to 250,000, up from 248,000 last week. This could signal that the labor market is starting to show signs of cracking, thus putting pressure on the Fed to pivot its policies. Some analysts express that weakness in the labor market may lead to significant changes in crypto markets.
Fed Decision: What to Expect on Wednesday
The key event is Wednesday's FOMC meeting. According to the CME FedWatch Tool, there is a 96.7% chance that the Fed will keep rates steady at 4.25% to 4.5%. No surprises are expected, but if they occur, it could quickly influence markets. Additionally, Donald Trump's comments on the need for a quicker response from the Fed may impact the situation as well. If the Fed acts earlier on rate cuts, Bitcoin may experience significant upward movement.
The economic data expected this week could play an essential role for crypto markets and Bitcoin's price. Traders are observing these developments closely while preparing for possible changes.
