Bitcoin‘s price continues to exhibit significant fluctuations despite favorable inflation data. Recent sales in the US stock markets, which reached a new all-time high by surpassing 5600 points, have not been mirrored by Bitcoin. Instead, Bitcoin’s price has plummeted to around $57,000, diverging from the stock market‘s bullish trend.
Why Are Fed Interest Rate Announcements Important?
Fed member Daly recently made statements that are crucial for crypto investors. Despite poor first-quarter inflation data, the latest figures have shown improvement, with current data falling below expectations. Additionally, non-farm employment data has been revised downward, indicating less employment vitality than previously thought.
Daly highlighted several key points in her statements, emphasizing the importance of labor market signals from the Fed. She noted the need for more information before making precise decisions, falling housing prices, and the slow decline in super-core inflation. Daly also mentioned that while the labor market is softening, it remains strong, suggesting potential policy adjustments.
What Can Investors Infer from Daly’s Remarks?
– Many people discussing the labor market is a significant Fed signal.
– Additional data is needed for precise next steps.
– Falling housing prices slowed by low supply.
– Positive decline in non-housing super-core inflation.
– Likelihood of increased unemployment due to labor market slowdown.
– Labor market is softening but remains strong.
– Potential need for policy adjustments.
– Recent reassuring inflation data but with uneven progress.
– Expected gradual decrease in inflation and labor market slowdown.
– Economy could warrant one or two rate cuts this year.
Given the negative data from the first quarter, gaining the Fed’s confidence has become more challenging. However, unless unexpectedly poor data emerges, two rate cuts seem probable this year. Cryptocurrencies may react to these developments, albeit with some delay.