The Week’s Financial Events
This week, there are several key financial events that may impact the crypto market. On September 19, data will be released for housing starts and building permits in the US. These indicators provide insight into the current state of the housing market, although they do not directly affect crypto markets.
The most significant event to watch out for is the Federal Reserve meeting on Wednesday, September 20. While it is not expected that the central bank will change its stance on interest rate policy or provide a definitive near-term outlook, the focus will be on the Fed’s economic forecast, known as the Summary of Economic Projections (SEP).
“Fed guidance on Wednesday sets the tone for the next few meetings. Expect to see lots of volatility this week.”
According to reports, the Fed may lower its core inflation forecast and increase its estimate for the longer-term neutral rate. The central bank’s intention to keep interest rates high to combat inflation may have negative implications for households with increasing levels of debt and rising personal interest payments.
On September 21, data for jobless claims and existing home sales will be released, but these are not expected to have a significant impact on markets.
Crypto Market Outlook
As of now, crypto markets have remained relatively stable with total capitalization at $1.1 trillion. Bitcoin briefly reached $26,700 but quickly retreated to around $26,668. Ethereum has shown minimal activity over the weekend and is hovering around $1,630.
With a low probability of a Fed rate change this week, it is likely that crypto markets will continue their consolidation phase and remain relatively stagnant.
Hot Take: Crypto Markets Brace for Volatility Amidst Federal Reserve Meeting
The upcoming Federal Reserve meeting is expected to set the tone for the rest of the year and could bring significant volatility to the crypto market. While the central bank is unlikely to change its interest rate policy, its economic forecast and potential adjustments to core inflation and neutral rate estimates will be closely watched. The Fed’s commitment to keeping interest rates high may negatively impact households with increasing debt and rising personal interest payments. As a result, crypto markets are anticipated to maintain their current consolidation phase as investors await further guidance from the Federal Reserve.
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