Key Events In The Week Ahead: Crypto Markets Brace for Powell’s Speech and NFP Data
The cryptocurrency market saw a pullback following last week’s highs, with Bitcoin retreating from $66,500 and Ether falling below $2,650. Investors focus on two critical events this week: Federal Reserve Chair Jerome Powell’s upcoming speech and the U.S. non-farm payroll (NFP) data.
These events are likely to set the tone for crypto and broader markets.
The Powell Speech
On Monday, Jerome Powell will clarify the Federal Reserve’s recent decision to cut interest rates by 50 basis points, its first rate cut since 2020. Investors are looking for hints on whether further aggressive cuts will follow.
The market eagerly awaits Powell’s speech at the National Association for Business Economics. This comes after the Fed cut interest rates by 50 basis points in September, marking the first rate cut since 2020. Investors are keen to see if Powell will hint at further cuts or maintain a more cautious stance.
The September 2024 NABE Outlook adds weight to the discussion, with 39% of economists citing a monetary policy mistake as the biggest risk in the next year. Panelists raised economic growth forecasts for 2024 but lowered projections for 2025, with unemployment expected to rise to 4.1% in 2024.
Crypto markets are dumping in anticipation of Powell’s speech and other key events.
Powell’s speech could confirm or alleviate these concerns, setting the tone for the coming months. If Powell signals more aggressive cuts, cryptocurrencies could rally, while a more measured approach could lead to market caution.
Predictions suggest that Powell will aim to balance rate cuts without triggering renewed inflation concerns. Economists worry about the risk of a monetary policy mistake, particularly rising unemployment.
Crypto markets, sensitive to macroeconomic conditions, could see increased volatility. Risk-on assets like Bitcoin and Ether could see renewed upward momentum if Powell signals faster cuts. However, if the speech reflects caution, signaling slower or fewer cuts, cryptocurrencies might face short-term selling pressure.
The markets are dumping in anticipation of the Fed chair’s speech.
Non-Farm Payroll Data
The U.S. Labor Department will release September’s non-farm payroll data on Friday. This report is a critical indicator of the health of the U.S. labor market, which the Fed has closely monitored to gauge the impact of its monetary policy.
August’s NFP data showed weakness in the labor market, but September’s report is expected to show modest improvement. Historically, stronger-than-expected NFP figures have pushed the Federal Reserve to maintain or even tighten its monetary policy, which could slow down the crypto market.
Conversely, weaker employment data could boost speculation that the Fed will cut rates more aggressively, providing a tailwind for Bitcoin and Ether. Recent months have shown a steady decline in U.S. inflation, but the labor market remains crucial.
Key events in this week include Powell speech and other data.
With traders expecting moderate growth in employment numbers, Friday’s report could confirm the Fed’s current approach to handling interest rates. As these two events unfold, the crypto market’s correlation with macroeconomic conditions will likely lead to increased volatility, making this a pivotal week for investors.
Friday’s U.S. non-farm payroll (NFP) data will be a crucial indicator of labor market health, but the U.S. Job Openings for August, released earlier on Tuesday, will also provide important context. Job openings measure labor demand and can reveal early signs of a cooling job market.
A decline in openings could signal weakening labor demand, reinforcing the case for further Federal Reserve rate cuts to prevent a sharp rise in unemployment.
The post Key Events In The Week Ahead: Crypto Markets Brace for Powell’s Speech and NFP Data appeared first on CoinChapter.
