After the Fed CPI data came true as expected, the belief in the markets that inflation will continue to fall has strengthened. However, Bitcoin is currently trying to regain the levels it lost after the Kamala Harris – Donald Trump TV match last night.

Looking at Bitcoin After Fed Data

When we look at the Bitcoin chart, we can see that it has fallen by 1.19 percent in the last 24 hours according to TradingView data. After US presidential candidate Donald Trump, who has more openly expressed his support for cryptocurrencies, was interpreted by the press as being behind Kamala Harris, Bitcoin could not maintain yesterday’s 57600 level.

The fact that today’s inflation data came as expected may ignite the fire of the rise in Bitcoin. Bitcoin is currently trying to hold on to $57,000. If it wins here, the next target will be the 57600 band where yesterday’s close took place and then the $58,000 region.

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The post Fed Announces CPI Data – September 11, 2024 appeared first on Coin Engineer.

Criticizing the current monetary policy of the US, Arthur Hayes stated in a new article that the FED’s lowering of interest rates could be a trigger for Bitcoin to rise. According to Hayes, the US economy does not actually need to lower interest rates, but such a rate cut will not be a long-term solution and will only be a short-term stimulus.

Arthur Hayes Makes Statements About Bitcoin Rise

Arthur Hayes stated in his article that many people consider the FED’s interest rate cuts as a sign of a possible recession. Hayes thinks that if these recession fears come true, the FED could print a significant amount of money, which could increase inflation. This scenario could lead to an increase in the value of Bitcoin due to its limited supply.

Hayes also stated that global central banks, including the FED, have been cutting interest rates without reaching their inflation targets. He said that this situation could support the appreciation of Bitcoin and other cryptocurrencies.

Might interest you: New Zealand Announced a New Crypto Tax Bill

Hayes summarized his views as follows:

“I am a crypto guy, I don’t do shows. So I don’t know if stocks will rise or not. Some fear that there will be a recession in the US and therefore in global markets after the FED cuts interest rates. This may be true. Imagine what they will do if the FED cuts interest rates when inflation is above its target and growth is strong and there is a real recession in the US. They will accelerate money printing and significantly increase the money supply. This will lead to higher inflation. However, for assets with limited supply like Bitcoin, it will provide a lightning-fast rise.”

Arthur Hayes’ statements have sparked a wide debate about the possible impact on Bitcoin and the general cryptocurrency markets, and investors continue to closely monitor the FED’s future interest rate policies.

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The post Arthur Hayes Says the Bitcoin Rise Depends on the Fed! appeared first on Coin Engineer.

The dollar index and bitcoin depend on core inflation, housing rents and the Fed’s views on the inflation path. Investment banks expect a decrease in housing rents. A higher-than-expected CPI could shake risk assets. Wednesday could be a decisive day in the markets as the critical US consumer price index report is due to be released just hours before the Federal Reserve meets.

The Labor Department’s CPI report will be released at 12:30 UTC and is expected to show the cost of living will rise 0.1% in May, following a 0.3% increase in April, according to FactSet. This would keep the annual inflation rate steady at 3.4%. At the same time, core inflation excluding volatile food and energy items is expected to increase by 0.3% in May, the same rate as in April.

Then, at 18:00 UTC, the Fed is expected to keep its benchmark borrowing cost steady between 5.25% and 5.5% and release its interest rate dot chart. Inflation data is expected to influence dot chart projections and Powell’s post-meeting remarks.

Here are the important factors that may affect the dollar index and bitcoin:

Core Inflation and Rental Price Increase

According to investment banks, the core CPI risk is stated to be on the downside. “Core price growth, excluding food and energy, is expected to slow to 3.5% (from 3.6% in April), with a more normal 0.2% monthly increase. Residential rent price growth is also expected to be lower than the core services non-rent measure that Fed policymakers watch closely.” with the monthly increase expected to slow,” RBC economists say.

According to ING, some economists predict that Owners’ Equivalent Rent, which has a 40% weight in the core CPI basket, will finally fall. A possible easing in housing price pressures, one of the sources of stickiness in inflation in recent months, could revive expectations for a Fed interest rate cut, which could in turn lower the dollar. A weaker dollar often comes with a rally in risk assets like bitcoin.

According to JPMorgan, the dollar will likely rise if monthly core CPI exceeds 0.4%.

Bitcoin has remained under pressure since Friday, losing more than 5% to around $67,350, according to CoinDesk data. The dollar index, an indicator that measures the value of the greenback against major currencies, increased by 1% to 105.20.

Fed Statement

A rate decision to remain as it stands is the most likely outcome, with the interest rate projection chart expected to show two rate cuts this year instead of three. Since Friday’s warmer-than-expected employment data, markets have ruled out more than two rate cuts this year.

Therefore, the focus will be on the central bank’s view on the course of inflation. “If the Fed omits from its statement the sentence ‘In recent months, there has been no further progress toward the Committee’s 2% inflation target,’ short-term U.S. [Treasury] yields and the dollar could decline,” ING said in a note to clients Wednesday morning.

“Chairman Powell usually holds a dovish press conference, and the dollar has closed lower on the day of the last four FOMC meetings,” ING reports. “We would need to see a shock of 0.4% monthly core CPI figure or a more hawkish Powell that would bring DXY to 105.90/106.00 levels. We think this is unlikely.”

This year, while bitcoin generally experienced price declines before the Fed decision, it rose again after the decision.

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The post US CPI and Fed Meeting: Things to Consider When Compensating Bitcoin Losses appeared first on Coin Engineer.