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

Crypto markets remained flat over the weekend following a fall last week, dropping total capitalization to $2.38 trillion.

This week’s economic calendar could induce more volatility as key inflation data is reported 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 PPI (Producer Price Index) report, which reflects input prices for producers and manufacturers, measuring the costs of producing consumer goods and directly affecting retail pricing.

It is viewed as a pre-indicator of inflationary pressures, making it a leading indicator for the following month’s CPI (Consumer Price Index) report.

Key Events This Week:

1. April PPI Inflation data – Tuesday

2. Fed Chair Powell Speaks – Tuesday

3. April CPI Inflation data – Wednesday

4. April Retail Sales data – Wednesday

5. Philadelphia Fed Manufacturing data – Thursday

6. Total of 12 Fed speaker events this week…

— The Kobeissi Letter (@KobeissiLetter) May 12, 2024

April’s Core CPI report is released on Wednesday. This is one of the two key indicators used to measure inflation, the second being Personal Consumption Expenditures or PCE.

CPI directly shapes price trends in the economy, consumer spending, and business outlooks. It also directly impacts the Federal Reserve’s policy rate decisions.

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

There are also a total of 12 Federal Reserve speaker events this week, including chair Jerome Powell on Tuesday.

According to a Conference Board measure of company CEO expectations survey last week, the majority of US CEOs expect the Fed to cut rates just once this year.

Out of 136 CEOs surveyed, 31% said they do not expect any rate cuts this year, while 26% project 2. “Meanwhile, markets are pricing just 2 rate cuts this year as a base case with the first cut in September,” reported Kobeissi.

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

How the Federal Reserve works pic.twitter.com/3rRhbBfcJe

— Elon Musk (@elonmusk) May 11, 2024

Crypto Market Outlook

Crypto markets remain subdued this Monday morning in Asia, with little movement among most of the majors.

Bitcoin prices were around $61,000 at the time of writing having remained at almost the same time as yesterday. The asset is down 4.3% since the same time last week, however.

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

The altcoins were predominantly in the red, with larger losses for Solana, Dogecoin, Avalanche, and Near Protocol.