Crypto Market: FOMC In Focus As GDP & PCE Data Raises Fed’s Rate Cut Concerns

Investors in the crypto market are on edge as they await the Federal Open Market Committee (FOMC) interest-rate decision, amid growing apprehensions over potential delays in the Federal Reserve’s rate cut plans. Notably, the recent economic indicators, including U.S. GDP and Personal Consumption Expenditures (PCE) inflation data, have exacerbated concerns, signaling a possible hawkish stance from the Fed.

Focus on FOMC Decision and Other Economic Events

As the crypto market braces for volatility, attention is squarely fixed on the upcoming FOMC interest-rate decision scheduled for May 1. Investors are eager to glean insights from Federal Reserve Chair Jerome Powell’s subsequent press conference, expected to shed light on the central bank’s future policy trajectory.

According to the CME FedWatchTool, there is a 97.6% probability that the Federal Reserve will keep the interest rate unchanged, with market pundits anticipating further delays in rate cuts. Meanwhile, several other key economic events scheduled throughout the week, including the release of consumer confidence data and U.S. trade deficit figures, will offer vital clues to crypto market traders about the U.S. economic condition.

For context, May 2 marks the release of U.S. Trade Deficit and Productivity data, offering insights into the health of the nation’s economy. Subsequently, on May 3, the U.S. employment report for April will be unveiled, crucial for understanding labor market dynamics amid central bank interest rate adjustments.

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Crypto Market Braces For Volatility

The latest data from the Bureau of Economic Analysis revealed concerning figures, with first-quarter GDP growth falling short at 1.6% against market expectations of 2.5%. This disappointing performance has heightened worries about inflationary pressures. In addition, the unexpected surge in the Core PCE Price Index from 2.0% to 3.7% in Q1 and a rise in PCE inflation from 1.8% to 3.4% has further dampened the crypto market sentiment.

Simultaneously, the Core PCE inflation for March, excluding food and energy prices, rose 0.3% MoM and 2.8% annually, surpassing market forecasts. Such inflationary spikes have fueled apprehensions about a potential delay in the Federal Reserve’s policy rate cut plans, adding to crypto market instability.

Meanwhile, the crypto market has gone through volatile trading lately, amid gloomy economic data, and significant Bitcoin ETF outflows. Notably, the Bitcoin ETF has noted outflow for the three consecutive days through April 26 last week.

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