Crypto traders head into a busy week on the US economic calendar after comments from Federal Reserve chair Jerome Powell last Friday. Speaking at Jackson Hole, Powell noted that risks are “shifting in a way that may warrant” a less restrictive policy, though he stopped short of confirming rate cuts.
The first data point is Tuesday’s consumer confidence reading. Economists expect a dip to 96.5, compared to 97.2 in July. On Friday, the University of Michigan’s consumer sentiment index will be published, with forecasts pointing to 58.6, unchanged from July and still among the lowest levels recorded this century.
Being indicative of household expectations of inflation and spending power, these switches could bring about a more patient Fed. Such a move might favor Bitcoin and other risk assets until a selloff is staged on equities in the short term with stronger numbers.
Labor Market Signals
Weekly jobless claims will provide another read on the economy. Initial filings for unemployment stood at 235,000 for the week ending August 16. Analysts expect this week’s figure to edge lower to around 230,000, suggesting continued resilience in the labor market.
At the same time, continuing claims have been trending higher, reaching post-2021 highs. This indicates that while fewer people may be losing jobs, those already unemployed are taking longer to return to work.
If claims come in lower, the Fed may feel less pressure to cut rates quickly. A rise, however, would add to concerns over economic weakness, which could feed into higher demand for alternative assets such as crypto.
PCE Inflation Data
Friday’s Personal Consumption Expenditures (PCE) report will be the most closely followed release. Estimates point to headline PCE rising 2.6% year-on-year, while core PCE is forecast at 2.9%, just above July’s 2.8%.
Core PCE, the Fed’s preferred gauge of inflation that strips out food and energy items, would signal persistence in inflation if it comes in high and may hold rate cuts, thereby putting pressure on liquidity-sensitive assets such as Bitcoin. Simultaneously, investors buying Bitcoin as a hedge may take longer-running inflation as a reason for bigger exposure.
Earnings and Market Levels
Beyond economic data, Nvidia will release its earnings this week. The semiconductor firm is expected to report a 48% increase in earnings per share on revenue of about $46 billion, according to Reuters. As one of the largest players in artificial intelligence, Nvidia’s results are often seen as an indicator for broader tech investment, which can influence digital assets.
At press time, Bitcoin was trading around $112,200, down just over 3% in the past day. Ethereum stood at $4,710, slipping after hitting fresh highs over the weekend. Traders are now watching upcoming US economic data to gauge the market direction heading into September.
