The cryptocurrency market posted strong gains last week as expectations grew for a possible interest rate cut by the U.S. Federal Reserve in September.
On Friday, August 22, Bitcoin nearly hit $65,000 and Ethereum climbed to $2,800. These gains came after Fed Chairman Jemore Powell suggested that the U.S. government could cut interest rates.
Market attention now turns to upcoming US PCE data and other key economic indicators, which could determine further developments.
Crucial Fed Statements Expected This Week
San Francisco Fed President Mary Daly is scheduled to give a televised interview on Monday, August 26, followed by remarks by 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 sign of firmness could quickly lead to massive sell-offs, impacting the broader financial landscape, including the cryptocurrency sector.
US PCE and GDP data
In addition to the Fed updates, traders are also awaiting the latest U.S. personal consumption expenditure (PCE) inflation data on Friday, which will provide a clearer picture of inflation trends.
Inflation in July is expected to edge up to 0.2%, compared to 0.1% in June. Year-over-year inflation is expected to remain stable at 2.5%. The core PCE index, which excludes food and energy prices, is also expected to remain at 0.2% month-over-month, but could edge up to 2.7% year-over-year.
If the data shows 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 Gold as US CPI Signals Possible Fed Rate Cut
