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This week was expected to be very active, and investors were fully aware of it. However, we started faster than expected. The MTGOX news caused the price of Bitcoin (BTC) to fall below $61,000, confirming that investors have been rightfully avoiding risk for days. GDP and PCE data could further increase volatility this week. So, what do the Fed announcements say?
Fed Announcements
The GDP data midweek will show the growth of the US economy, while the PCE data coming on Friday will give everyone an idea about the fight against inflation. If the GDP is in line with expectations and the PCE is below expectations, the belief may form in risk markets that the Fed (with the support of the latest inflation data) will definitively cut rates by September or in September.
Fed member Goolsbee was speaking at the time of writing, and the key points of his statements are as follows:
“Fed policy is restrictive. Slowing inflation data could open the door to easier policy. I am optimistic that we will see improvement in inflation data. I hope the Fed will have more confidence that inflation will return to 2%. The real economy does not show traditional overheating. We must consider the restrictiveness compared to other economies. Apart from inflation data, the economy shows signs of cooling.”
