Macro Outlook: Will This Week’s Core PCE Data Move Crypto Markets?

Crypto markets rebounded over the weekend following the Fed’s rate decision on March 20, but this week also has a lot of key economic data.

The week will be shorter, with TradFi markets closed for a holiday on March 29 for Good Friday. However, investors are awaiting Fed Chair Jerome Powell’s speech to get more clues on the central bank’s policy outlook.

Key Events This Week:

1. New Home Sales data – Monday

2. CB Consumer Confidence data – Tuesday

3. US Q4 2023 GDP data – Thursday

4. February PCE Inflation data – Friday

5. Fed Chair Powell Speaks – Friday

6. Total of 5 Fed Speaker Events

Another busy week with stock at…

— The Kobeissi Letter (@KobeissiLetter) March 24, 2024

Economic Calendar

The first main report that could impact markets is the fourth quarter 2023 US GDP data due to be released on Thursday, March 28. This third and final reading is expected to confirm that economic growth was an annualized 3.2%.

Consumer Sentiment Index and Consumer Inflation Expectation reports are also due on Thursday. They are used to gauge consumer sentiment, confidence levels, and views of long-term inflation.

The annual inflation rate for the United States was 3.2% for the 12 months ending February, which is still higher than the Fed’s target.

Friday will see the release of February’s Core Personal Consumption Expenditures (PCE), which reflects the average amount of money consumers spend monthly, excluding seasonally volatile products such as food and energy.

This index is used by central bank policymakers as their primary inflation gauge. Higher-than-expected CPI and PCI numbers a few weeks back created a lot of market volatility as inflation remains stubbornly high.

Fed Chair Jerome Powell will also speak on Friday on “Macroeconomics and Monetary Policy,” potentially offering insight into the economic outlook for the coming months. The current probability that the FOMC will keep interest rates unchanged in May is 89.1%, according to CME data.

Global Macro Investor CEO Raoul Pal stated that “macro summer” has arrived, which means a boom in risk-on assets such as tech stocks and crypto as liquidity improves.

Crypto Market Outlook

Crypto markets had a volatile week last week but appear to have stabilized over the weekend. Total capitalization gained 2.5% over the past 24 hours to reach $2.67 trillion during Monday morning trading in Asia.

Markets have declined 7.5% from their multi-year peak earlier this month as Bitcoin ETF fervor abates.

BTC was changing hands for $67,000 following a 4% gain on the day as it recovered. The asset is currently 10% down from its March 14 all-time high.

ETH prices have also increased by 4%, reaching $3,470 this Monday morning in Asia. Most of the altcoins were seeing smaller gains aside from Solana (SOL), Bitcoin Cash (BCH), and Internet Computer (ICP).