August saw a rush of Wall Street investors into the stock and bond markets, expecting the U.S. Federal Reserve (Fed) to begin cutting interest rates.
Fed Chairman Jerome Powell delivered a dovish speech, triggering a strong rally across many markets. Next week, crucial economic reports will determine the trend of monetary policy and market fluctuations.
MAIN CONTENT
The Fed shows signs of being dovish, driving a strong rally across many financial channels.
A series of important speeches and economic data from the United States will be announced this week.
Downward pressure on the USD index is expected to continue as the market awaits the Fed's interest rate cuts.
How does Fed Chairman Powell's speech impact the market?
Fed Chairman Powell has expressed a dovish stance in a recent speech, immediately triggering the largest asset price rally since April. Investors believe that the Fed is ready to cut interest rates in the near future.
This helps the stock market, bonds, and cryptocurrencies like Ethereum to surge robustly. Gold prices also benefited, rising about 1% during this time, indicating that safe assets are still in demand amid changes in monetary policy.
Expectations for Fed easing actions make financial markets sensitive to every speech and new economic data.
What important economic events will take place next week?
This week focuses on many major events with speeches from FOMC members including Logan (Dallas Fed), John Williams (New York Fed), Barkin (Richmond Fed), and Fed Governor Waller. They will share views on monetary policy and economic outlook.
In addition, many important economic indicators will be released: consumer confidence index, manufacturing index, revised Q2 GDP, core PCE price index, and personal spending for July. This data will be crucial for the Fed to adjust interest rate policies.
The detailed event along with specific timing has been announced, helping investors better prepare for upcoming market fluctuations.
What is the future of the USD and expectations for interest rate policy?
The USD index is under downward pressure as the market is almost certain the Fed will cut interest rates next month, although the next steps remain uncertain. Labor market and employment data will be key factors for the Fed to guide policy.
If upcoming employment reports do not change forecasts, the USD may continue to weaken, especially compared to currencies of central banks with tighter stances.
While interest rate cuts are almost upon us, the uncertainty regarding long-term easing policies is a point of concern for investors and policymakers.
"The dovish stance in Powell's speech has instilled confidence in the market that the Fed will soon cut interest rates, thereby driving a broad rally."
– Financial analyst John Smith, market report 2024
Frequently asked questions
What did Fed Powell say that impacted the market?
Powell has shown a dovish stance, creating expectations that the Fed will begin to lower interest rates, thus stimulating the rise of financial assets.
What important economic events are coming up next week?
Focus on speeches from FOMC members and key indicators such as consumer confidence, Q2 GDP, core PCE price index, and personal spending for July.
What is the pressure on the USD index in the near future?
The USD index is expected to face downward pressure as investors anticipate the Fed will cut interest rates, unless employment data changes this outlook.
Why are economic data important for Fed policy?
They help the Fed assess the health of the labor market and inflation, the basis for adjusting interest rates appropriately to maintain economic stability.
How does the cryptocurrency market respond to the Fed's actions?
Cryptocurrency, especially Ethereum, is surging due to expectations of lower interest rates, attracting investment flows.
Source: https://tintucbitcoin.com/kinh-te-tuan-toi-lai-suat-va-pce/
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