The financial market has recently seen a turbulent scenario, with rising macroeconomic concerns weighing on investors’ sentiment. Notably, recent economic indicators such as the US Employment data and hawkish statements from Fed officials have fueled concerns among traders. However, investors are now eagerly awaiting the US CPI inflation and PPI data to be released later this week. It has also fueled speculation on how these indicators could affect the performance of cryptocurrencies.
Cryptocurrencies await US CPI inflation data
The crypto market is eagerly awaiting the US CPI inflation data to be released on Wednesday, January 15th for clues on the current economic health. Notably, recent indicators such as strong US Employment data have recently fueled investors’ concerns. According to the latest data from the Labor Department, the US added 256,000 jobs in December, beating the market forecast of 160,000. Moreover, the unemployment rate fell to 4.1% from 4.2% in the previous month. This strong US Labor market data further strengthened bets on a potential hawkish move by the FED. In particular, it seems that the center may stick to its tight monetary policy and the market may have to wait until June for the first Fed rate cut this year.
US CPI inflation is one of the key focal points of the financial market this week, crypto space aside. According to market forecasts, the Consumer Price Index is expected to remain unchanged at 0.3%, while the annual CPI is expected to rise to 2.9% from 2.7% in the previous month. On the other hand, Core CPI, which excludes food and energy prices, is expected to decline to 0.2% from 0.3% recorded last month. At the same time, Core CPI is expected to remain unchanged at 3.3% yoy. This suggests that the market is bracing for hot inflation data this week. However, if the data comes in above expectations, it could further dampen investors’ sentiment and potentially affect the performance of BTC and altcoins. In other words, warmer-than-expected numbers could give investors more room to act on their hawkish plans.
US PPI inflation is also on the cards
Market observers are eagerly awaiting the US CPI inflation data as well as the upcoming US PPI data. Producer Price Index (PPI) data is scheduled to be released on Tuesday, January 14th. This data is another important measure that the Fed considers to gauge inflationary pressure in the market. If this data also comes in hotter than expected, the central bank may move forward with higher interest rates to combat inflation. It could also significantly impact traders’ sentiment and affect the performance of the crypto market.
Bitcoin and top altcoins have recorded choppy trading, especially after Fed Chair Jerome Powell last month indicated only two rate cuts through 2025. Previously, the market was betting on four rate cuts this year. In addition, recent statements from Fed officials have further dampened market sentiment. In particular, officials said that the central bank will closely monitor economic data and other factors before deciding to cut interest rates. Nevertheless, the upcoming US CPI inflation and PPI data will be closely monitored by market participants.
However, if the US FED decides to move forward with a hawkish plan, the broader crypto market could face volatile trading in the coming days. However, despite the short-term concerns, many market observers remained confident about the long-term trajectory of the cryptoassets space.
