- Fed Officials’ Statements
- US PCE Inflation and GDP Data Expectations
- Importance of PCE Data for Fed Policy
The cryptocurrency market recorded a strong rise this week with growing expectations that the US Federal Reserve (Fed) will cut interest rates in September.
Fed Officials’ Statements
Recent statements from Fed officials have increased optimism in the market. In particular, Fed Chairman Jerome Powell and other officials indicated a move towards a more dovish policy stance. These statements reinforced expectations of a rate cut at the September meeting and supported the recent rally in the cryptocurrency market.
US PCE Inflation and GDP Data Expectations
Markets are in a wait-and-see mode for the PCE data to be released this week to clarify uncertainty over inflation in the US. According to market forecasts, July US PCE inflation data is expected to rise to 0.2% from 0.1% in the previous month. On an annual basis, it is expected to remain steady at 2.5%. At the same time, core PCE data is expected to stay steady at 0.2% on a monthly basis but rise from 2.6% to 2.7% on an annual basis.
Importance of PCE Data for Fed Policy
Fed Chairman Powell, while hinting at a rate cut in September and triggering a rally in Bitcoin and Ethereum, also stated that they would look at upcoming data before making this decision. Therefore, the upcoming PCE data will play a key role in determining the Fed’s stance on interest rate policy.
Thus, PCE data and revised US GDP data will significantly impact Fed policy and, consequently, the cryptocurrency market. Expectations of a rate cut continue to support market optimism, but any deviation from these expectations could lead to a shift in sentiment.
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