What Was the US Inflation Data Expectation?

Expectations were that the annual inflation rate would come in at 2.9%. If the data came in above expectations, expectations for rate cuts could be delayed, which could put pressure on risk assets, particularly cryptocurrencies.

At 6:00 PM, Fed Chairman Jerome Powell will deliver his semi-annual monetary policy report to the House Financial Services Committee. Powell’s remarks could provide insights into interest rate policies and inflation targets. In particular, statements suggesting that keeping interest rates high for an extended period could have negative effects on economic growth and employment might create uncertainty in the markets.

So, What Was the Outcome?

The US annual inflation rate was announced at 3.0%, slightly above the expected 2.9%. This led investors to price in less Fed easing. Following the data, investors pushed back expectations for the next Fed rate cut from September to December. This development put pressure on risk assets.

Bitcoin, amid rising inflation and delayed rate cut expectations, fell below the $95,000 level, prompting a more cautious approach from investors. The cryptocurrency market is facing increased uncertainty with rising inflation and interest rates.

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Peter Schiff noted that the recent high inflation rates in the US are based on policies that predate Biden’s presidency. Schiff said that the policy gap between money creation and price increases indicates that worse days are coming, and that the effects of Biden’s policies will be felt in the coming months.

Peter Schiff Criticizes Dual Causes of Inflation

Schiff, a well-known economist who is skeptical of Bitcoin, argues that a significant portion of today’s inflation is due to money printed to cover budget deficits during the Trump presidency.

Peter Schiff criticized Larry Kudlow, who served as Director of the National Economic Council under the Trump administration, for attributing inflation solely to Biden. Schiff noted that Kudlow did not express any concern about inflation while serving in the Trump administration, and that such criticisms undermine credibility when made selectively.

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Peter Schiff said that inflationary pressures are not simply the result of the current administration’s fiscal policies, but rather an accumulation of policies that have been in place for a long time.

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Critical events for the crypto market next week include the July FOMC Minutes and Fed Chair Jerome Powell’s speech at the Jackson Hole Summit. The FOMC Minutes are expected to set the tone for the market due to their potential impact on investor sentiment. Powell’s comments could also provide clues about the central bank’s future policy rate plans.

Crypto Market Awaits US Fed Officials’ Speeches

A series of events planned for this week will determine the future performance of the financial market. Global financial markets and the crypto market are eagerly awaiting these events amid expectations that the US Federal Reserve could potentially cut interest rates in September.

The week will begin with Fed Governor Christopher Waller’s remarks on Monday, August 19. Then, on Tuesday, August 20, Atlanta Fed President Raphael Bostic and Fed Vice Chairman Michael Barr will speak. At the same time, Fed Chair Jerome Powell will speak at the Jackson Hole Summit on Friday, August 23.

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These statements will be closely watched by investors because they will provide clues about how the U.S. central bank will proceed with future policy rates. However, according to CME FedWatch Tool data, the probability of the Fed announcing a 25 basis point rate cut at its September meeting is 75%.

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