This Week’s US Inflation Reports Are Expected to Shake Crypto Markets

Cryptocurrency markets remained flat over the weekend after falling last week, bringing total capital down to $2.38 trillion.

This week's economic calendar could bring further volatility as key inflation data is announced alongside a number of Federal Reserve speeches, which could indicate the direction of monetary policy going forward.

Economic calendar

Tuesday will see the release of the core Producer Price Index report, which reflects input prices for producers and manufacturers, measuring the costs of producing consumer goods and directly influencing retail prices.

It is seen as a forward indicator of inflationary pressures, making it a leading indicator for the following month's Consumer Price Index (CPI) report.

Main events this week:

1. Producer Price Index inflation data for April – Tuesday

2. Fed Chairman Powell speaks – Tuesday

3. CPI inflation data for April – Wednesday

4. Retail sales data for April – Wednesday

5. Philadelphia Fed Manufacturing Data – Thursday

6. Total of 12 Fed speaker events this week…

– Al Qubaisi Letter (@KobeissiLetter) May 12, 2024

The core CPI report for April will be released on Wednesday. This is one of the two main indicators used to measure inflation, the second being personal consumption expenditures or PCE.

The Consumer Price Index (CPI) directly shapes price trends in the economy, consumer spending, and business expectations. It also directly affects the interest rate decisions made by the Federal Reserve.

“If CPI inflation rises again this week, it will mark the third consecutive monthly increase,” Al Qubaisi’s letter said.

There are also a total of 12 Fed speaker events this week, including a meeting with Chairman Jerome Powell on Tuesday.

According to a Conference Board measure of corporate CEO expectations polled last week, a majority of U.S. CEOs expect the Fed to cut interest rates just once this year.

Of the 136 CEOs surveyed, 31% said they did not expect any interest rate cuts this year, while 26% expected a second cut. mentioned Qubaisi.

Interestingly, Elon Musk took a swipe at the Fed over the weekend, comparing it to the game of Monopoly. He specifically pointed to a section of the rules referring to the in-game bank, which states that the bank never goes bankrupt and can print new money when needed.

How does the Federal Reserve work? pic.twitter.com/3rRhbBfcJe

– Elon Musk (@elonmusk) May 11, 2024

Crypto market forecast

Cryptocurrency markets remain weak on Monday morning in Asia, with little movement among most major currencies.

Bitcoin prices were around $61,000 at the time of writing, and remained at roughly the same time as yesterday. However, the asset has fallen by 4.3% since the same time last week.

Ethereum has failed to recover above $3,000 after dipping below it on May 10, and remains bearish in the short term at $2,900 at the time of writing.

Altcoins were mostly in the red, with Solana, Dogecoin, Avalanche, and Near Protocol having bigger losses.