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Bitcoin price remains above $63,000 as several key U.S. economic events this week could spark cryptocurrency volatility.
Upcoming U.S. PMI, GDP, and consumer confidence reports could impact Bitcoin’s performance and investor strategies.
Fed Chairman Powell’s speech and core PCE inflation data will be critical to market liquidity and potential cryptocurrency price movements.
As the last week of September approaches, financial markets are focused on multiple economic events in the U.S. However, some of these events will directly or indirectly affect the portfolios and investment strategies of cryptocurrency investors.
Bitcoin (BTC) has had a good start to the week, holding above the $63,000 mark during the early hours of the Asian session.
Manufacturing and services PMI
The Business Survey Committee will release Purchasing Managers' Index (PMI) data for the manufacturing and services sectors on Monday. The reports will shed light on the health of these sectors.
The previous index was 55.7, and the median forecast was 55.4. A PMI above 50 indicates expansion in the manufacturing and service sectors. This could be bullish for risk assets such as Bitcoin, especially if the report shows economic growth.
Consumer confidence and consumer sentiment
The consumer confidence report is due on Tuesday, September 24, followed by the consumer sentiment report on Friday. The two surveys, while coming from different sources, measure how optimistic or pessimistic consumers are about the economic outlook.
Both reports reflect consumers' attitudes toward their financial outlook and their views on business conditions and the job market over the next six months. Essentially, they provide a snapshot of how people feel about the economy now and in the near future.
Consumer optimism is growing as inflation in the U.S. declines. The positive shift is largely driven by expectations that inflation will continue to decline through the end of the year, which will make it easier for households to manage their finances.
If these reports show an increase in confidence and sentiment, it could indicate that consumers are more willing to spend. This improved outlook could also have a knock-on effect that could benefit speculative assets such as Bitcoin. A more confident consumer base generally means greater risk tolerance, which bodes well for investments that are seen as high-risk but high-reward.
Second quarter GDP
The second quarter gross domestic product report, due on Thursday, is one of the key economic indicators of the week. This is the second revision after the initial report in July, which showed GDP growing 2.8% from the previous quarter. This figure significantly exceeded the 1.4% growth in the previous quarter.
Domestic consumption growth has been a key driver of GDP growth. Higher consumer spending typically boosts economic growth and inflation, while also pushing up the dollar. Conversely, slower consumption could weaken those effects.
A strong GDP report is likely to boost U.S. citizens’ confidence in the stability of the economy. This positive sentiment could also be good for Bitcoin’s price, as many investors view it as an alternative investment or hedging tool. Additionally, strong economic data could reinforce the Federal Reserve’s more cautious approach to monetary policy. Cryptocurrency investors pay particular attention to the Fed’s policies, as they directly affect market liquidity and conditions.
Fed Speech: Jerome Powell and Michelle Bowman
Fed Chairman Jerome Powell is scheduled to give his opening remarks on Thursday, with his comments eagerly awaited following recent inflation data and the FOMC’s 50 basis point rate cut. Powell’s remarks could have a significant impact on market sentiment.
In addition to Powell's speech, several other Fed officials are scheduled to speak this week. Cryptocurrency investors are expected to pay close attention to these remarks from Monday to Friday, especially after last week's unexpected rate cut. Fed Governor Michelle Bowman is of particular interest, as she is scheduled to speak on Tuesday and Thursday.
“A larger policy action by the Committee could have been interpreted as a premature declaration of victory on our path to price stability,” Bowman said in a statement Friday. “I am confident that moving toward a more neutral stance of policy at a steady pace will ensure further reductions in inflation toward our 2 percent objective.”
Bowman has been in the spotlight for her dissent on recent policy decisions, becoming the first Fed governor to do so since 2005. Given her unique position, Bowman's upcoming speech will be closely watched as investors look for clarity on her concerns about the pace of rate cuts.
Core PCE inflation rate
The personal consumption expenditures (PCE) price index, which will be released on Friday, will be a key economic indicator to watch this week. Core PCE excludes more volatile categories such as food and energy and is one of the key data points used by the Federal Reserve to assess inflation trends and guide future monetary policy decisions.
Analysts expect core personal consumption expenditures to rise 0.2% month-over-month and 2.7% year-over-year. Meanwhile, overall inflation is expected to slow to 2.3%.
If PCE inflation comes in lower than expected in August, it could increase the likelihood of further rate cuts, which is bullish for Bitcoin. Lower interest rates tend to encourage borrowing, which increases liquidity in financial markets.
An environment of low interest rates and high liquidity is generally bullish for Bitcoin, as investors tend to turn to riskier assets during such periods. As of this writing, Bitcoin is trading at $63,882, up 1.51% since Monday’s open, according to BeInCrypto data.
