Crypto Markets Brace for Fed's Crucial Comments: What's Expected?
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The Fed's July meeting minutes are set to be released on Wednesday this week, followed by the Jackson Hole symposium on Thursday.
Traders will be looking out for the annual economic policy symposium in Jackson Hole this week, which may provide further clarity on the interest rate outlook, with Fed Chair Jerome Powell scheduled to speak.
Powell will offer a speech at the annual event on Friday, which brings together economists, monetary policymakers and academics from all around the world.
Tomiwabold OlajideThe markets have fully priced in a Fed rate decrease in September; however, the odds of a 50 basis point reduction have been reduced to 28.5%, according to CME's FedWatch tool.
Expectations
Wall Street anticipates that Federal Reserve Chair Jerome Powell might confirm interest rate cuts during the central bank's annual meeting in Jackson Hole, Wyoming.
Investors are still processing last week's announcement of U.S. retail sales numbers for July and weekly initial unemployment claims, both of which were stronger than expected. The statistics helped to alleviate recent fears about the strength of the U.S. economy, lifting global stock markets.
While markets expect the Fed to start lowering borrowing costs at its September meeting, Powell could easily remain tight-lipped on the timing of rate cuts in his Friday speech. It would be very much in his nature to take a cautious, noncommittal approach to announcing precisely how much rates could decrease when the Fed is through with its easing.
Price action on crypto market
The crypto market is posting a mixed reaction in early Monday's trading session ahead of the release of Federal Reserve meeting minutes and the much-expected central bank symposium in Jackson Hole this week.
Bitcoin and a handful of other cryptocurrencies, including Ethereum, Shiba Inu, internet computer, PEPE, BONK and Helium have experienced losses between 3% and 13%. Some cryptocurrencies, such as XRP, Toncoin, Monero and Polygon (MATIC), were seeing gains between 2% and 4%.
Bitcoin and the wider crypto market are seeing losses so far this month, even as global markets rebound to record highs after shaking off recession fears about the U.S. economy. Bitcoin has fallen by roughly 10% in August.
Analysts identified the risk of Bitcoin selling confiscated by the U.S. government — which is reported to have over $12 billion — as among the challenges for digital assets.
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