Crypto Market Eyes US CPI as Fed Governor Waller Warns of Rate Hike
Highlights
- Crypto markets await US CPI and PPI data for hints on inflation and policy signals.
- Fed Governor Waller warns persistent inflation could prompt another Federal Reserve rate hike.
- Investors are also watching fresh developments on the CLARITY Act this week.
The crypto market has entered a crucial week, with a flurry of major events scheduled for the upcoming days. For context, the US Consumer Price Index (CPI) and Producer Price Index (PPI) inflation data are expected to come in on July 14 and 15, respectively.
In addition, the CLARITY Act has also entered a crucial week, with market participants awaiting new details on the crypto bill. Amid this, the US Federal Reserve Governor Christopher Waller has hinted towards a potential hawkish path ahead if the inflation readings come in hotter than expected.
Crypto Market Awaits US CPI Amid Rate Hike Fear
The US CPI inflation is expected to come in on July 14, which would provide further clarity on the current inflationary pressure in the US. Notably, the crypto market would also track the inflation figures in this crucial week, given the recent volatile scenario in the market.
For context, Bitcoin price today fell below the $62,000 mark, falling from its local high of around $64.5k, amid soaring US-Iran tensions. Now, with the Fed Governor Waller hinting at a possible hawkish move by the central bank, all eyes shift to the upcoming inflation releases.
According to Wall estimates, the US CPI inflation is expected to cool to 0.2% in June, down from 0.5% in May. The year-over-year (YoY) surge is also expected to come in at 3.8%, marking a plunge from 4.2% in the prior month.
At the same time, investors and the US Federal Reserve would also keep close track of the US PPI data later this week. However, if the readings come in hotter-than-anticipated, it could force the US central bank to consider a potential rate hike in the coming days and impact the crypto market.
Fed Governor Waller Sparks Market Concerns
According to Reuters, Fed Governor Christopher Waller said that if inflation continues to stay above the central bank’s 2% target, it might take a hawkish path ahead. In other words, the US Federal Reserve might consider a rate hike “in the near term,” which has spooked crypto market traders.
Following the remarks, the odds of a Fed rate hike in September now soared to 51.6%, CME FedWatch Tool showed. Notably, higher rates often dampen the risk-bet appetite of investors, which in turn impacts crypto prices.
Meanwhile, the crypto market watchers are also awaiting fresh insights on the CLARITY Act. In addition, US President Donald Trump has also urged the Senate to pass the crypto bill in Senator Graham’s honor, who passed away on July 11.
Considering all these aspects, the broader financial market is now awaiting the US CPI inflation data on Tuesday. While softer data might help offer temporary relief, a hotter reading might continue to impact assets amid the soaring geopolitical tensions.
Amid the ongoing uncertainty, investors might consider checking our the tutorials on best ways to earn passive income with crypto.
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