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- After last Wednesday’s FOMC meeting, the crypto and traditional markets saw heightened swings following Jerome Powell’s remarks.
- Investors now wait for this week’s economic indicators, PCE inflation, and jobless claims to gauge Bitcoin’s potential for a comeback.
Bitcoin (BTC) has cooled off a bit after its recent run, pulling back from the $116,000 zone that traders had marked as a key psychological level. Now, the spotlight shifts to this week’s U.S. macroeconomic data that could shape its next move, PCE inflation numbers, comments from Fed Chair Jerome Powell, and the latest jobless claims.
The Federal Reserve just trimmed interest rates by 25 basis points to 4.00%-4.25%, signaling concern over slowing labor demand while inflation still sits well above the 2% target.
At the time of writing, BTC is changing hands around $112,400, down 2.7% on the day, 2.1% lower on the week, and off about 2.8% over the past month. Still, optimism lingers. Analyst Ali Martinez suggested the chart may be setting up for a breakout, saying he’s “watching for buying pressure to form the right shoulder before a breakout to $130,000!”
PCE Inflation
All eyes are on Friday’s Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, and a potential market mover for Bitcoin. If the data comes in hotter than expected, it could spark fears of sticky inflation. This will then raise the odds that the Fed keeps rates higher for longer, or even considers another hike.
For Bitcoin, that scenario cuts both ways: inflation often boosts demand for “store of value” assets, but higher rates generally weigh on risk assets like crypto. Forecasters are looking for the August PCE data to show renewed inflation momentum, with headline PCE rising 0.3% month-on-month and 2.7% year-on-year, increasing from July’s readings of 0.2% and 2.6%.
Alongside this, investors will also be watching the University of Michigan’s consumer sentiment index for additional clues about household confidence in the inflation outlook.
Jerome Powell Speech
On Tuesday, Federal Reserve Chair Jerome Powell takes center stage, with markets hanging on every word. On Wednesday, the Fed delivered its first rate cut in nine months, 25 basis points, while Powell cautioned that inflationary pressures on goods could continue building through the rest of 2024 and into 2026.
His tone matters as much as the numbers: a dovish hint that more rate cuts are coming often draws traders back into risk assets like Bitcoin, while a hawkish warning, especially against the backdrop of sticky inflation or weak labor data, can spook markets and trigger short-term sell-offs.
With Powell’s current term running until May 2026, and the Trump administration already considering 11 candidates to replace him, his remarks carry weight.
Also, Marty Party said, “Monday, newly confirmed Fed governor Stephen Miran speaks for the first time. That’s the only Fed talk to listen to. He architected the entire administration’s monetary and fiscal policy.”
Initial Jobless Claims
Initial jobless claims are a key pulse check on the U.S. labor market, and by extension, a driver of Fed policy. Rising claims often suggest the economy is cooling, which can push the Fed toward easing policy, a move generally viewed as positive for Bitcoin.
Conversely, falling or stable claims signal resilience, giving the Fed more room to keep rates higher, which tends to add volatility to risk assets. For the week ending September 13, jobless claims fell sharply to 231,000, down from the prior 264,000, a positive sign for the U.S. economy and the dollar.
Economists surveyed by MarketWatch had expected a higher figure, around 235,000. Still, as Mark Riepe pointed out, big week-to-week swings make it useful to focus on the four-week moving average, which, since July, continues to trend upward despite recent dips.
