A report from PiQ Suite confirmed that BOJ Governor Ueda will join the annual economic policy symposium of the Federal Reserve, hosted by the Federal Reserve of Kansas City from August 21 to 23.
This meeting will bring together central bankers, policymakers, and economists to discuss global economic challenges and possible monetary policy strategies. With the attendance of Kazuo Ueda, market participants are looking to assess the involvement of the Bank of Japan (BOJ). Additionally, investors are also preparing to analyze in detail each speech from Fed Chair Jerome Powell and the European Central Bank.
According to a publication from Crypto Xpresso, host of the web3 show The Daily Alpha, this event has already triggered bearish price movements in financial markets. However, it noted that the market is recovering after:
"Jackson Hole is an annual meeting for central bankers. Since 2022, Jackson Hole has been a guaranteed volatility event for the S&P 500. Every year, it falls, and then usually rebounds. 2022: Powell took a tough stance → the S&P fell 3% in one day. 2023: Holds firm on inflation → markets fell afterwards. 2024: Even with a moderate tone → the market fell first. Pattern: drop at Jackson Hole, rebound afterwards."
While financial markets fell after the Jackson Hole event, will this be the case this time?
As we approach the Fed's Jackson Hole conference, market analysts have observed that traders are making "advantage" trades. This activity involves making speculative moves ahead of policy speeches and is already generating volatility in the cryptocurrency markets. Bitcoin and Ethereum, for example, have suffered severe corrections as investors have hedged their portfolios against potential macroeconomic shocks.
In line with this, market analyst Easy observed that cryptocurrency investors have been selling their cryptocurrency holdings in preparation for an aggressive tone from the Fed. The analyst further claims that a rate cut in September is not guaranteed at this time.
At this moment, the CME Fed Watch tool shows that the chances of a rate cut in September have increased to 84.9% as market participants lose confidence regarding the 25 basis point rate cut.
According to Easy, a restrictive statement from the Fed could provide short-term relief to the US dollar, putting pressure on the cryptocurrency market. On the other hand, a moderate signal from the Fed could generate a short-term relief rally for the cryptocurrency market. Easy noted:
"However, if there are no cuts for September, it will be a tough 4-6 weeks until we have clarity on possible cuts in October. The market hates uncertainty and we are seeing it in price dynamics right now."
While the cryptocurrency market seems to be recovering from the recent drop, it could fall if uncertainty about the interest rate cut decision in September persists. Consequently, cryptocurrency investors will be attentive to any signals from the annual Fed conference in Wyoming.
