Tomorrow, Chairman Jerome Powell will deliver a keynote speech at the annual meeting of central bankers in Jackson Hole. This could be a significant event for Bitcoin and the broader financial markets, as speculation mounts about the potential impact on monetary policy and the financial landscape.

Notably, the Jackson Hole conference comes just after the US Bureau of Labor Statistics released a historic revision to US employment data. The job additions were revised down by 818,000, the largest revision since 2009, underscoring the weakness in the labor market – a key factor in monetary policy considerations, as inflation begins to cool, with the core Consumer Price Index (CPI) falling from 3.9% in December 2023 to 3.2% in July.

Will Bitcoin Return to Uptrend?

The Jackson Hole conference also comes shortly after the release of the Federal Open Market Committee (FOMC) meeting minutes, which revealed that the committee is divided on whether to cut interest rates in 2024 amid a fluctuating economic data landscape. Weakening labor markets and subdued inflation have raised expectations that Powell will signal a rate cut, possibly as early as September.

Lekker Capital analyst Quinn Thompson has provided a detailed analysis on X, linking current economic indicators to the likelihood of the Fed shifting to a more dovish stance. “The data has changed dramatically this year, but I still see a lot of people who believe Powell will continue to be hawkish. The first half of the year was the time to do that, but now the data is giving the Fed a green light,” Thompson said. He noted that with inflation falling and unemployment rising – from 3.7% in December to 4.3% now – the conditions are ripe for the Fed to start cutting rates.

Thompson also addressed concerns about Powell taking a hawkish stance, commenting: “There’s been a lot of talk that Powell will disappoint the market on Friday, but I don’t see why. The Fed isn’t going to raise 50 basis points in September and the market doesn’t think so, so no one needs to worry. Powell pretty much confirmed the 25 basis point hike at the last FOMC meeting.” He stressed that the combination of weaker inflation data and concerns about the labor market have strengthened the case for a rate cut, making a hawkish turn less likely.

In contrast, Mark Minervini, author of the popular books “Trade Like a Stock Market Wizard” and “Think and Trade Like a Champion,” said: “Wall Street is betting that Powell will confirm that a rate cut is coming at Jackson Hole on Friday. The question is not ‘whether to cut?’ but ‘by how much?’ Many are expecting Powell to indicate that tight monetary policy is no longer necessary.” Minervini noted that any deviation from this expectation could disappoint investors, suggesting that the market is ready for dovish news.

The Bitcoin market is highly sensitive to changes in US monetary policy. Interest rate cuts typically reduce the appeal of yield-bearing assets such as bonds, thereby increasing the appeal of riskier investments such as stocks and Bitcoin. Therefore, if Powell takes a dovish stance, this could lead to increased capital inflows into the market, restarting Bitcoin's bullish momentum.

Conversely, if Powell's tone leans toward maintaining or tightening monetary policy, this could create risk-off sentiment among investors, putting downward pressure on Bitcoin as capital moves to safer, higher-yielding assets.

So markets will be paying attention not only to Powell’s policy signals but also to the specific tone and language of his speech. Historical precedent from Powell’s previous speeches at Jackson Hole suggests that markets can move quickly and dramatically depending on the nature of his announcements.

Source: https://tapchibitcoin.io/jackson-hole-dot-tang-gia-bitcoin-se-tro-lai-sau-bai-phat-bieu-cua-powell.html