US Inflation Rate to Shake Crypto Markets

US inflation rate looms next week amidst a flurry of economic reports as Crypto Markets brace for impact.

After plunging last week, the cryptocurrency markets stayed unchanged over the weekend, bringing the overall valuation down to $2.38 trillion.

The economic schedule for this week could lead to more volatility, as many speeches by the Federal Reserve and the release of essential inflation rate could signal future monetary policy decisions.

The primary PPI (Producer Price Index) report, which measures the costs of making consumer goods and directly impacts retail pricing, will be released on Tuesday. It represents input prices for producers and manufacturers.

It is considered a leading indicator for next month’s Consumer Price Index (CPI) report since it is seen as a precursor to inflationary pressures.

The Core CPI figure for April is made public on Wednesday. One of the primary metrics used to gauge inflation is PCE or personal consumption expenditures.

The CPI directly impacts consumer spending, company outlooks, and price patterns in the economy. It also immediately affects the Federal Reserve’s policy rate choices.

“If CPI inflation rises again this week, it will mark the third straight monthly increase,” observed the Kobeissi Letter.

This week features twelve Federal Reserve speaker events, with chair Jerome Powell scheduled to appear on Tuesday.

According to a Conference Board survey conducted last week measuring CEO forecasts of companies, most US CEOs anticipate that the Fed will only lower rates once this year.

Of the 136 CEOs polled, 31% stated they don’t think there will be any rate cuts this year, while 26% anticipate 2. As a basic scenario, markets are pricing in just two rate cuts this year, with the first one coming in September, according to Kobeissi.

Remarkably, Elon Musk compared the Federal Reserve to the board game Monopoly during the weekend. He explicitly mentioned a regulation about the in-game bank that states it never goes bankrupt and can produce more money as needed.

Outlook for Inflation Rate Crypto Market

This Monday morning in Asia, the cryptocurrency markets remain calm, with minimal activity across most majors.

As of writing, the price of Bitcoin was approximately $61,000, having stayed virtually unchanged from yesterday. But since this time last week, the asset has dropped 4.3%.

Following a decline below $3,000 on May 10, Ethereum has been unable to rise over $3,000 and is currently short-term bearish at $2,900.

Most cryptocurrencies dropped, with Solana, Dogecoin, Avalanche, and Near Protocol suffering the most significant losses.