With this remark, Powell reaffirmed that political pressure has no influence on the Fed’s monetary policy. He also emphasized that “the President’s calls for rate cuts do not affect our job in any way.”

Inflation Uncertainty and Tariff Impact

Another critical focus of the meeting was inflation and the impact of tariffs. Powell said, “The core inflation picture looks good, but we can’t say how long it will last.” He added that there is significant uncertainty around tariffs and their longer-term implications.

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“We haven’t yet seen major economic effects from tariff data,” Powell said, while warning that if the sharp increases in tariffs continue, “we could see higher inflation and lower employment.”

He also noted, “According to survey participants, inflation expectations are now being shaped by tariffs. So far, tariffs have been significantly larger than expected.”

Rate Cut Signals Without a Timeline

Although Powell left the door open for future rate cuts, he refrained from committing to any specific timeline. Regarding market expectations of two cuts in March, he responded, “We can’t make that prediction right now; we need to wait until June.”

One of Powell’s key remarks was:

“There are conditions this year where rate cuts could be appropriate.” He added, “When things evolve and it’s appropriate, we can move quickly. But now is the time to wait before changing policy.”

These statements suggest that the Federal Reserve is not rushing into decisions but remains prepared to act swiftly if economic data requires it.

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First of all, growth data in the US economy (GDP) may have a direct impact on investor confidence. A GDP data in line with expectations or stronger may indicate that the economic recovery is strong, which may increase demand for risky assets (such as stocks and cryptocurrencies) in general. However, if GDP growth falls short of expectations, investors may turn to safe havens (such as the US dollar and gold) due to concerns about an economic recession. This may create selling pressure on cryptocurrencies such as Bitcoin.

In addition, unemployment claims data are critical for market expectations. Applications that are lower than expected indicate that the labor market is strong and support a positive outlook in the economy. This may cause an increase in risk appetite in the cryptocurrency market. However, the increase in unemployment claims may create volatility in Bitcoin and other cryptocurrencies, especially with the expectation that the Fed may continue to tighten monetary policy. High unemployment rates or rising applications can reduce the appeal of risky assets and lead to a decline in cryptocurrencies.

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Such economic data, especially in the US, affects investors’ expectations regarding the Fed’s interest rate policies. Signs of economic weakness can strengthen the expectation that the Fed will keep interest rates low for a long time, which could be a positive development for assets like Bitcoin.

Bitcoin Before US Data

Bitcoin, like other assets, reacted and rose from the $55,000 area it was in at the beginning of September after the Fed lowered interest rates by 50 basis points.

The rise in Bitcoin led to good increases in many crypto assets, including altcoins. However, in today’s statements, the support level to be followed specifically for Bitcoin will be the $63,500 band, while the resistance will be the $65,000 area.

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With this decline, the data to come from the US has gained even more importance. Expectations are for core monthly CPI to increase by 0.2 percent (previous 0.2%), annual CPI to increase by 2.5 percent (previous 2.9%), monthly CPI to increase by 0.2 percent (previous 0.2%). Bitcoin may close bullish candles after the decrease in inflation and the increase in hot money as a result of meeting expectations. A volatile market will be waiting for us after the data is announced. Investors need to be careful during this period.

Looking at Bitcoin Before the Data

When we look at Bitcoin’s 4-hour chart before the Fed data, we see that it could not maintain the levels it gained yesterday.

According to TradingView data, Bitcoin has fallen by 1.7 percent in the last 24 hours. The positive Fed data may be a factor in Bitcoin regaining the $57-58 thousand region.

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The post Markets Await Fed Statements – September 11, 2024 appeared first on Coin Engineer.

The Importance of Jackson Hole and Fed Powell’s Messages

Jackson Hole is known as an important symposium that brings together central bank leaders from around the world. This year, Powell’s speech here may contain clues, especially about the Fed’s future monetary policy strategy. In the past, Powell has given clear and strong messages about fighting inflation and interest rates. This year, the downward trend in inflation and weak employment data lead to the expectation that Powell’s tone may be softer.

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Morgan Stanley’s global chief economist Seth Carpenter stated that all attention will be on Jackson Hole this week and that he expects Powell to focus on the Fed’s medium-term strategy. One of the most curious topics in this symposium is what kind of policy the Fed will follow in September regarding interest rates.

Mohamed El-Erian’s Views

Famous economist Mohamed El-Erian emphasized that Jackson Hole offers a golden opportunity for Powell. El-Erian stated that Powell should speak clearly about the economic and political situation in his speech. Otherwise, he warned that uncertainty and fluctuations in the markets could increase.

These developments may cause increased volatility in the cryptocurrency market. Powell’s messages will shape investors’ expectations about the Fed’s future monetary policy, which may create sudden movements in the prices of crypto assets.

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The post Crypto Market Waits For Fed’s Statement This Week – 20 August 2024 appeared first on Coin Engineer.