Here are three things to watch for this week:
1. Federal Reserve Interest Rate Decision – Wednesday, June 12
All eyes are on Wednesday, June 12, when the US central bank is expected to announce its decision on interest rates.
Despite expectations that the Federal Reserve will keep interest rates in the 5.25% to 5.5% range for the seventh straight meeting, this comes after strong jobs data for May.
Most analysts believe the central bank will not change interest rates this week, and may reduce the number of cuts scheduled for this year.
2. Consumer Price Index (CPI) reports – Wednesday, June 12
Wednesday is expected to be a busy day, as the core Consumer Price Index (CPI) reports, a leading indicator of inflation in the economy, will be released.
CPI data greatly influences the Federal Reserve's monetary policy decisions, including interest rate adjustments.
A higher CPI reading usually indicates increasing inflation, which puts pressure on the central bank to raise interest rates or keep them the same.
Expectations indicate that the annual inflation rate will remain stable at 3.4%, which reinforces expectations that interest rates will not change this week.
Previous data indicates that Bitcoin prices react strongly to CPI data.
When CPI readings were higher than expected, Bitcoin witnessed a decline, while it rose when readings were lower than expected.
3. Producer Price Index (PPI) Reports – Thursday, June 13
On Thursday, the core Producer Price Index (PPI) report will be released, which measures the average change in selling prices received by domestic producers of goods and services.
This indicator is a valuable tool for FOMC policymakers to assess inflation.
Ryan Sweet, chief US economist at Oxford Economics, believes that the Federal Reserve is awaiting data that strengthens its confidence that inflation is on a sustainable path towards its 2% target.
Analysts expect the first interest rate cut to come at the monetary policy meeting in September, which is the last meeting before the presidential elections scheduled for November 5.
The effects of the Fed's interest rate decision have likely already been factored into cryptocurrency prices, as prices are expected to remain unchanged.
We may see some volatility mid-week, but the market's sideways momentum may continue.