The cryptocurrency market saw strong gains last week as expectations grew for a potential interest rate cut by the US Federal Reserve in September.
On Friday, Aug 22nd, Bitcoin nearly reached $65,000, and Ethereum rose to $2,800. These gains came after remarks from Fed Chair Jemore Powell suggesting that the U.S. Govt might cut its interest rates.
Now, the market’s attention turns to upcoming US PCE data and other key economic indicators, which could determine the next moves.
Crucial Fed Remarks Expected This Week
San Francisco Fed President Mary Daly is slated to give a TV interview on Monday, August 26, followed by remarks from Atlanta Fed President Raphael Bostic on Wednesday, August 28. Investors expect these speeches to echo last week’s dovish sentiment, further supporting market momentum.
However, any hint of hawkishness could quickly lead to sell-offs, affecting the broader financial landscape, including the crypto sector.
US PCE Data and GDP Data
In addition to Fed updates, traders are also awaiting the latest US Personal Consumption Expenditures (PCE) inflation data on Friday, which will give a clearer picture of inflation trends.
For July, inflation is expected to rise slightly to 0.2%, up from 0.1% in June. Year-over-year inflation is projected to stay steady at 2.5%. Core PCE, which excludes food and energy prices, is also expected to remain at 0.2% month-over-month but may see a slight increase to 2.7% year-over-year.
If the data reveals higher-than-expected inflation, it could dampen market optimism and potentially trigger a pullback in the ongoing crypto rally. The week ahead will be crucial in shaping market sentiment as traders await these key updates.
Also Read: Michael Burry Sells as Gold US CPI Signals Possible Fed Rate Cut
