WILL CORE PCE DATA IMPACT CRYPTO MARKETS THIS WEEK?

The upcoming week promises a flurry of activity on the U.S. economic front, especially after the Federal Reserve’s recent decision to keep interest rates steady.

Following the Fed’s announcement on March 20, cryptocurrency markets saw a notable uptick over the weekend. This week, however, will be filled with crucial economic indicators.

Despite a shortened week due to the Good Friday holiday on March 29, all eyes will be on Federal Reserve Chairman Jerome Powell’s upcoming address for further guidance on future monetary policies.

Economic Indicators to Watch

A key report anticipated this week is the final estimate of the U.S. GDP for the fourth quarter of 2023, set for release on March 28. It is widely expected to verify that the economy grew at an annual rate of 3.2%.

Additionally, the Consumer Sentiment Index and the Consumer Inflation Expectation reports, due the same day, will provide insights into the public’s confidence and inflationary expectations.

Despite a reported annual inflation rate of 3.2% for the year ending in February—above the Federal Reserve’s goal—the markets are particularly focused on February’s Core Personal Consumption Expenditures (PCE) data set to be published on Friday. This measure, which excludes the cost of food and energy, serves as a critical indicator of inflation for Fed policymakers. Recent higher-than-expected CPI and PCE figures have led to significant market fluctuations due to ongoing inflation concerns.

On Friday, Jerome Powell will discuss “Macroeconomics and Monetary Policy,” possibly shedding light on the economic projections for the near term. According to CME Group’s projections, there’s an 89.1% chance that interest rates will remain unchanged in May.

Raoul Pal, CEO of Global Macro Investor, suggests that we’ve entered a “macro summer,” signaling a potential uptick in risk-on assets like technology stocks and cryptocurrencies, buoyed by increased liquidity.

Cryptocurrency Market Projections

After experiencing fluctuations last week, the cryptocurrency market has shown signs of steadying, with a 2.5% increase in total market capitalization in the last 24 hours, reaching $2.67 trillion by Monday morning trading in Asia.

The market has seen a 7.5% retreat from its recent peak earlier in the month, as excitement over Bitcoin ETFs wanes.

Bitcoin is currently trading at $67,000, marking a 4% increase on the day, though it remains 10% lower than its March 14 peak.

Ethereum has similarly risen by 4%, hitting $3,470 this Monday morning. Meanwhile, altcoins like Solana (SOL), Bitcoin Cash (BCH), and Internet Computer (ICP) are among those showing notable gains.

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