Bitcoin and Ethereum prices will have a busy week
Macroeconomic data will impact the price of volatile assets, such as cryptocurrencies and stocks
Bitcoin (BTC) started the week trading around $69,000 (USD), as it did over the weekend, as a key day approaches. On Wednesday, June 12, the US consumer price index (CPI) and the interest rate decision will be published.
“We are back to square one where the Fed (U.S. Federal Reserve) could hardly justify a rate cut when employment data remains strong and inflation is not declining as fast as it should,” said Ipek Ozkardeskaya, senior analyst at Swissquote bank.
Last Friday, stock markets, along with Bitcoin and cryptocurrencies such as Ethereum's ether (ETH), retreated amid a larger-than-expected job increase in the economic powerhouse. As the graph shows, BTC then fell from USD 71,000 to USD 69,000, remaining 6% from its all-time high of USD 73,700 registered three months ago.
The Fed cannot be put on hold indefinitely, nor should it indicate that it is going to be put on hold,” said Adam Posen, director of the Peterson Institute for International Economics and former member of the Monetary Policy Committee. However, he sees a cut unlikely until September or later. “If the data allows it, they will try very hard to do nothing until November,” he added.
Eswar Prasad, a professor at Cornell University, expressed himself similarly. “Any Fed action, which seems unlikely in the summer, could now be pushed uncomfortably close to the November presidential election,” he said.
“Central banks don't want to appear to be playing politics at all, so the easiest thing to do is to do nothing,” said Charles Goodhart, a former member of the Bank of England's Monetary Policy Committee.