Key Economic Events to Monitor in the Upcoming Week: US Consumer Price Index & Producer Price Index Report, Powell’s Testimony Could Influence Crypto Market Trends.
Next week is crucial for the cryptocurrency market due to several significant events taking place. These events include the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) data, speeches from important Federal Reserve officials, and testimony from Jerome Powell. These events have the potential to impact the direction of the cryptocurrency market in the coming week.
The release of the January jobs report on February 7 had a negative effect on the stock and cryptocurrency prices, causing a drop, while the dollar and bond yields increased. However, the jobs report was not the sole factor influencing these market changes. The week was characterized by strong economic data and growing concerns about upcoming U.S. tariffs. Although the January 2024 jobs report was a key highlight, other economic data also exceeded expectations.
During its latest meeting, the Federal Reserve decided to keep its main interest rate steady at 4.25%-4.50%. It emphasized that continuous improvement in inflation is necessary before considering rate reductions. Several Fed officials also expressed concerns that tariffs could lead to stricter policies for a longer period than what the markets anticipate.
The CPI report, which will be released on February 12, along with remarks from Federal Reserve Chair Jerome Powell, will play a crucial role in determining the direction of U.S. interest rates. Additionally, any updates on tariffs from the Trump administration will be closely monitored.
Although the first central bank decisions of 2025 have already taken place, this week still holds significant news for investors, as the important CPI report from the United States is forthcoming. In December, the main CPI rate slightly increased to 2.9% year-over-year, while the core rate decreased to 3.2%. Predictions from the Cleveland Fed’s Inflation Nowcasting model suggest that the main CPI rate is expected to have dropped to 2.85% in January, with the core rate slightly decreasing to 3.13%.
On February 11, key figures from the Federal Reserve, including Hammack, Williams, and Powell, will deliver speeches. The following day, February 12, talks will be given by the Fed’s Bostic and Powell, as well as the ECB’s Nagel and the Bank of England’s Greene, potentially impacting financial markets with their insights on monetary policy. Attention will also be focused on inflation numbers from China, economic statistics from Japan, and data on the U.K.’s gross domestic product.
Federal Reserve Chair Jerome Powell’s testimony to Congress, which takes place twice a year, is scheduled for this week. Although he is not expected to provide much new information, his appearance could still affect the markets. Powell will testify in the House of Representatives on Wednesday and in the Senate on Thursday, discussing the Fed’s view on the economy. Analysts from Deutsche Bank anticipate that he will stick to the script from the January Federal Open Market Committee (FOMC) meeting, but the market often finds something new in these appearances, including during the congressional Q&A session.
Economists believe that Powell will echo the common theme from recent Federal Reserve meetings, emphasizing that there is currently no rush to lower the key fed funds interest rate.
The release of strong Producer Price Index (PPI) or retail sales figures in the U.S. could potentially increase investor confidence in the dollar and delay interest rate cuts. However, unexpectedly high inflation could dampen investor sentiment, despite recent market performance. Strong industrial production numbers could raise the prices of oil and metals, while weak retail sales could reduce demand for commodities driven by consumer spending, negatively impacting the dollar. Consequently, a bullish comeback in the cryptocurrency market may be witnessed.