#Bitcoin Markets prepare for strong volatility after US CPI and Fed decision

Although the markets hope that central bankers will keep rates unchanged, the inflation data will be decisive

Whether it's another move higher or lower, traders are bracing for increased volatility sparked by Wednesday's two macroeconomic catalysts: a morning consumer prices report and the interest rate decision from the Federal Reserve in the afternoon.

While markets generally expect central bankers to keep rates unchanged, the inflation data, as well as Fed Chair Jerome Powell's press conference, will offer more clarity on how much the central bank could cut rates. interest this year.

Inflation has been the main focus of investors' attention, as the labor market has remained strong. U.S. job growth soared in May, with nonfarm payrolls increasing by 272,000, according to a Bureau of Labor Statistics report released Friday. Operators are comfortable with job creation above 150,000, Kaiser said. If it fell below that figure, the options market would likely begin to turn its attention to hiring rather than inflation, he explained.

Recent activity in options linked to the guaranteed overnight financing rate has been mixed. Demand for hedges pointing to the possibility of a dovish meeting has increased, opening the door to a rate cut in July or September monetary policy announcements. Fed rate swaps, for their part, discount 25 basis points of easing in the November decision