Powell releases dovish signals at the Jackson Hole annual meeting, suggesting that the Federal Reserve may cut interest rates in the future. Market expectations for a rate cut in September have risen to nearly 90%, making the July PCE data a key basis for the Fed's decision.
The U.S. July PCE price index increased by 2.6% year-on-year, with core inflation rising by 2.9%. Although this is above the 2% target, Powell mentioned that he may focus on employment risks (current U.S. job growth is slowing).
For the cryptocurrency market, the July PCE data is crucial:
• If the data is higher than expected, the likelihood of a Fed rate cut in September may decrease, and funds could flow out of the cryptocurrency market into traditional safe assets, leading to a sharp decline in prices of Bitcoin, Ethereum, and others, resulting in market panic and financing difficulties, which could impact projects.
• If the data is lower than expected, the likelihood of a September rate cut would greatly increase, market liquidity would rise, and funds could flow into the cryptocurrency market, pushing prices higher, but this may create a bubble, and if sentiment shifts later, investors could get trapped.
Currently, cryptocurrency investors are closely monitoring data trends, with some adjusting their positions and more taking a wait-and-see approach. The market feels tense due to the approaching data, and rumors can easily trigger volatility. Investors need to be cautious of risks.
The U.S. July PCE price index increased by 2.6% year-on-year, with core inflation rising by 2.9%. Although this is above the 2% target, Powell mentioned that he may focus on employment risks (current U.S. job growth is slowing).
For the cryptocurrency market, the July PCE data is crucial:
• If the data is higher than expected, the likelihood of a Fed rate cut in September may decrease, and funds could flow out of the cryptocurrency market into traditional safe assets, leading to a sharp decline in prices of Bitcoin, Ethereum, and others, resulting in market panic and financing difficulties, which could impact projects.
• If the data is lower than expected, the likelihood of a September rate cut would greatly increase, market liquidity would rise, and funds could flow into the cryptocurrency market, pushing prices higher, but this may create a bubble, and if sentiment shifts later, investors could get trapped.
Currently, cryptocurrency investors are closely monitoring data trends, with some adjusting their positions and more taking a wait-and-see approach. The market feels tense due to the approaching data, and rumors can easily trigger volatility. Investors need to be cautious of risks.
