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Crypto Market Awaits US PCE Inflation & Other Key Events, What To Expect?

Published

4 months ago

August 25, 2024

The crypto market noted a robust rally last week, with soaring bets over a potential Fed rate cut in September. Bitcoin neared the $65,000 level over the weekend, with Ethereum trading at $2,800. Now, the focus has shifted to the upcoming US PCE data, which would provide further cues on the inflationary pressure in the nation, along with several other key events.

So, let’s take a look at the major events and see how they may impact the market sentiment in the coming week.

US Fed Officials’ Remark To Shape Market Sentiment

The recent comments from the US Federal Reserve officials have so far fueled optimism in the market. For context, the recent remarks from several officials, including Fed Chair Jerome Powell’s speech, hint that the US central bank is leaning towards a softer policy stance going ahead.

The dovish comments have cemented bets over a potential US Fed rate cut at their upcoming meeting in September. This move has bolstered market confidence, as evidenced by the recent rally in the crypto market.

Now, the market eagerly awaits further cues from the Fed officials this coming week. On Monday, August 26, San Francisco Fed President Mary Daly is expected to appear in a TV interview. Following that, Atlanta Fed President Raphael Bostic is scheduled to give his remarks on Wednesday, August 28.

The market expects their comments to come in tandem with the dovish remarks from other officials last week. However, it’s worth noting that any other move, especially a hawkish remark, could further trigger concerns among traders, which could cause a potential selloff in the broader financial sector, let alone the crypto market.

Crypto Market Awaits US PCE Inflation & Revised GDP Data

The broader financial market eagerly awaits the upcoming US PCE data for further clarity over inflation. According to market estimates, the US PCE inflation figure for July is expected to come in at 0.2%, up from 0.1% in the prior month. On a YoY basis, it is expected to remain unchanged at 2.5%.

Simultaneously, the Core PCE figures are anticipated to remain unchanged at 0.2%, while on a YoY basis, it is expected to show a spike to 2.7% from the June figure of 2.6%. However, if the figure shows that inflation is hotter than anticipated, it could dampen investors’ sentiments.

Recently, Fed Chair Jerome Powell hints at a potential rate cut in September, fueling a rally in Bitcoin and Ethereum. However, he also said that the Fed will be considering the upcoming figures before coming to a decision. Having said that, the upcoming PCE figure will play a key role for the Fed’s upcoming stance on policy rates.

On the other hand, the second revision of the Q2 US GDP data is expected to be released on Thursday, August 29. It could provide insights into the economic health of the US, which could have a potential impact on the stocks as well as on the crypto market.

Meanwhile, most of the crypto recorded a strong surge last week, reflecting soaring market optimism. Despite that, investors should exercise due diligence before putting their bets, given the recent volatile scenario dominating the market.