Upcoming releases of US employment and consumer spending data, which serve as the Federal Reserve’s primary measures for inflation, are expected to generate significant activity in financial markets on February 29. The announcement may cause substantial fluctuations for risk assets at the month’s end. Optimistic employment figures from January coupled with the Personal Consumption Expenditures (PCE) Index will be crucial in determining the Federal Reserve’s interest rate decisions.
Anticipating Market Movement with Critical Data
Recent inflation figures have surpassed predictions, prompting market analysts to reassess the likelihood of the Fed reducing interest rates during its March meeting. Current estimates indicate a mere 4% chance of a rate decrease in March, with prospects increasing to 25% for May. This comes amidst the S&P 500 nearing its historic peak, reflecting a robust sentiment within US equities.
The Kobeissi Letter, a trade publication, emphasized the upcoming week’s focus on Federal Reserve actions following the impact of Nvidia’s strong earnings report the previous week. The question posed was whether the momentum towards record highs could sustain itself in light of Federal Reserve policies.
Bitcoin Encounters a Predictable Difficulty Adjustment
Bitcoin‘s price stability is now juxtaposed with underlying network metrics. Data indicates a predicted reduction in Bitcoin mining difficulty during the forthcoming automatic adjustment, a contrast to the pattern of sharp increases over the past year. While previous adjustments have shown significant jumps, the upcoming change is projected to be a modest dip of around 2%.
Amid speculation, Bitcoin miners appear to be capitalizing on current rewards before the halving event in April, which will slash block rewards by half. Nonetheless, data reflects a contrasting trend in distribution among significant Bitcoin holders, with miner wallet balances decreasing slightly since late October. Despite this, overall accumulation trends are outpacing new Bitcoin production, setting the stage for potential market impacts as supply tightens post-halving.
