Crypto Market This Week: CLARITY Act, Fed’s Kevin Warsh To Testify, CPI & PPI Data In Focus

For this week in the crypto market, investors are closely watching the U.S. inflation reading and Federal Reserve testimony. In addition, they are awaiting new details on the CLARITY Act. These events are significant as they have the potential to affect Bitcoin, altcoins, and overall risk sentiment.

Journalist Eleanor Terrett said on X, “This week will be a busy one for economic data, Fed speeches and, likely, further clarity on the status of the Clarity Act.”

What Are The Expectations For CPI & PPI Inflation Data?

Inflation data is the first thing in focus for the crypto market. For context, the Consumer Price Index (CPI) for June is to be released on Tuesday, July 14 at 8:30 a.m. ET. Thereafter, the Producer Price Index (PPI) will follow on Wednesday, July 15, at 8:30 am ET.

The headline CPI inflation is expected to decrease 0.2% compared with an earlier rise of 0.5%, according to the Market Watch data. Moreover, the forecast for annual CPI is 3.8%, lower than 4.2%. Meanwhile, the monthly change for Core CPI is likely to be 0.2%, and the annual change Core CPI is expected to be 2.8%, down from 2.9%.

For PPI, headline producer prices are expected to rise only 0.2% after jumping 1.1% previously. Whilst, the forecast for Core PPI data is projected to increase 0.3%, which is less than the previous 0.8% increase.

Investors should keep an eye on “fresh inflation data that could shape expectations for the Fed’s next interest rate decision,” Terrett said.

Softer inflation data could boost Fed rate cut expectations. This is typically a good sign for BTC and crypto in general. However, a stronger-than-anticipated inflation rate could cause the opportunity to ease to be postponed and put pressure on digital assets.

Fed Chair Kevin Warsh Moves To Testify Against Congress

The Fed’s twice-yearly monetary policy report will be presented to Congress Tuesday and Wednesday at 10:00 a.m. ET by Fed Chair Kevin Warsh. He will mostly be asked by lawmakers about inflation, interest rates and the economic outlook.

Terrett noted that Warsh “will likely be quizzed by lawmakers on a variety of topics relating to the Fed.” Hence, crypto traders should watch out for any potential hints on rate cuts. Bullish sentiment would benefit risk assets while a hawkish tone could lead to crypto market volatility, per experts.

What’s Next For The CLARITY Act?

The crypto industry is waiting for an update of the CLARITY Act as well. Terrett said it would merge “the Senate Banking and Senate Agriculture Committee texts.”

However, negotiations are continuing. She wrote that “key provisions are still being ‘actively negotiated’ and that an ethics deal is ‘not done.’” It is unclear what that means for when the Senate will vote on the bill, she added.

Meanwhile, the House Financial Services Committee will hold a field hearing called “Building the Future of Finance: How the CLARITY Act Unlocks Innovation.” It is scheduled for Friday, July 17, at 10:00 a.m. ET in New York.

If the bill makes any progress, it will contribute to a boost in the confidence of the U.S. crypto industry. However, Uncertainty may remain high in case of delays, which could weigh on the already bearish sentiment in the crypto market.

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