Markets
Fed Set to Release Crucial Comments for Markets, How It Affects Cryptocurrencies by U.Today
U.Today – Cryptocurrencies rallied on the back of stock gains early Monday, signaling growing optimism ahead of major central bank decisions.
This week, investors are awaiting key economic data releases and the Federal Reserve’s July meeting scheduled for later this week. The Fed’s meeting will begin on Tuesday and end on Wednesday, with an interest rate announcement and new monetary policy guidance.
Rates are widely expected to remain steady, but investors are looking for signals about when and how much rate cuts might come this year. They will therefore be watching closely any policy guidance the central bank issues, as well as the post-meeting press conference with Fed Chair Jerome Powell.
The personal consumption expenditures (PCE) price index, the Fed’s preferred inflation metric, came in as expected on Friday. PCE rose 0.1% from the previous month in June and 2.5% from a year earlier.
Traders had recently been strongly pricing in the possibility of the first interest rate drop coming in September.
While Fed officials have repeatedly said they are looking for more evidence that inflation is consistently returning to 2% before cutting rates, Fed Chair Jerome Powell indicated earlier this month that the central bank may not wait for inflation to hit that target before cutting rates.
Cryptocurrency market reacts
hit its highest level since mid-June, settling at $69,868 in today’s first trading session, as expectations of interest rate cuts by the U.S. Federal Reserve boosted investor sentiment.
At the time of writing, BTC is up 2.65% over the past 24 hours to $69,520. Several cryptocurrencies are also trading in the green, with gains ranging between 2% and 4%. Bitcoin’s spin-off has gained as much as 15%.
The Fed meeting later this week is expected to set the stage for a rate-cutting cycle, which is seen as favorable for cryptocurrencies; this expectation has lifted market sentiment.
Bitcoin is about $4,400 off its all-time high of about $74,000 in March. Inflows into specific U.S. exchange-traded funds have boosted Bitcoin’s value this year