FOMC in Focus: GDP & PCE Raise Fed Rate Cut Concerns

The crypto market is really interested in what the FOMC decides about interest rates. They’re waiting eagerly because the most recent GDP & PCE data has got them worried. They’re thinking there might be a delay in the Fed’s plans to cut rates, and that’s making them concerned.

Crypto investors are nervous as they wait for the FOMC to decide on interest rates. They fear the Fed might delay rate cuts, which could impact the market. Recent economic signs, like GDP and inflation data, worsen their concerns. It suggests the Fed might take a tougher stance, making investors uneasy.

Crypto Market Prepares for FOMC Decision

As the crypto market gears up for potential volatility, all eyes are on the upcoming FOMC interest-rate decision set for May 1. Investors eagerly await Federal Reserve Chair Jerome Powell’s subsequent press conference, hoping for insights into the central bank’s future policy direction.

According to the CME FedWatchTool, there’s a 97.6% likelihood that the Federal Reserve will maintain the interest rate, with expectations of further delays in rate cuts. Additionally, other significant economic events scheduled for the week, such as the release of consumer confidence data and U.S. trade deficit figures, will provide crucial hints to crypto market traders about the state of the U.S. economy.

On May 2, attention will turn to the release of U.S. Trade Deficit and Productivity data, offering valuable insights into the nation’s economic health. Subsequently, on May 3, the unveiling of the U.S. employment report for April will be crucial for understanding labor market dynamics amidst adjustments in central bank interest rates.

Crypto Market Concerns Amid Economic Data Fluctuations

The most recent data from the Bureau of Economic Analysis has sparked concerns, revealing a first-quarter GDP growth of only 1.6%, falling short of market expectations set at 2.5%. This disappointing performance has raised worries about inflationary pressures among investors.

Adding to the concerns, there was an unexpected surge in the Core PCE Price Index from 2.0% to 3.7% in Q1, along with a rise in PCE inflation from 1.8% to 3.4%. Such increases have further dampened sentiment in the crypto market.

The Core PCE inflation for March, excluding food and energy prices, rose 0.3% MoM and 2.8% annually, surpassing market forecasts. These inflationary spikes have fueled worries about a potential delay in the Federal Reserve’s plans to cut policy rates, contributing to instability in the crypto market.

Against the backdrop of gloomy economic data, the crypto market has experienced volatile trading, compounded by significant outflows from Bitcoin ETFs. Notably, Bitcoin ETFs saw outflows for three consecutive days through April 26 last week, adding to market jitters.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.


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