- U.S. retail sales data and FOMC meeting will influence crypto markets, with potential rate cuts boosting digital assets.
- Bank of Japan’s interest rate decision may impact crypto investments, while U.S. jobless claims could signal economic slowdown.
As the current economy remains unpredictable, crypto traders will watch several key macroeconomic events this week. These changes could impact both traditional markets and risk assets like digital currencies. From retail sales data in the U.S. to central bank decisions in Japan and the U.K., the financial market is set for possible volatility.
The week begins with the release of U.S. retail sales data, an important consumer spending gauge. Retail figures in January showed an unexpected decline due to concerns about Trump-era tariffs and a cautious outlook from consumers.
Additionally, traders will be looking to see whether this trend continues in February. Strong retail numbers could signal economic strength, boosting the U.S. dollar and leading to a sell-off in digital currencies as investors shift to safer assets. Moreover, as noted in our previous post, a weak retail report might raise expectations of Federal Reserve rate cuts, which historically have been positive for Bitcoin and other digital assets.
Federal Open Market Committee (FOMC) Meeting: Focus on the Fed’s Tone
Another key event this week is the Federal Open Market Committee (FOMC) meeting, scheduled for March 18-19. Following a hold on interest rates at 4.25%-4.5% in January, the market will analyze any new statements from Federal Reserve Chair Jerome Powell.
Market participants are eager to see if the Fed will lean towards a more bearish stance in the context of decreasing consumer spending and ongoing uncertainties. A more negative stance from Powell could strengthen the U.S. dollar, creating downward pressure on crypto prices. Conversely, any signs of rate cuts or a shift in policy could fuel a rally in Bitcoin and other altcoins.
Bank of Japan: Could Rate Hikes Reshape the Outlook?
Across the Pacific, the Bank of Japan (BOJ) will announce its decision on interest rates. After a series of rate hikes, the BOJ faces rising pressure due to Japan’s positive economic outlook. Recent reports showing a 3.1% rise in wages and additional quarters of GDP growth have raised speculation that the BOJ could raise rates further.
A stronger yen could reduce interest in crypto investments in Asia if investors flock to traditional assets. However, if the BOJ opts to keep rates even, the continued liquidity could provide a supportive backdrop for cryptocurrencies.
Later in the week, U.S. initial jobless claims data will be released, providing a summary of the labor market’s health. An increase in claims, such as the expected rise to 222,000, could signal a slowdown in economic activity, possibly prompting the Fed to consider easing measures. A decline or stable claims rate would likely support the Fed’s cautious approach, maintaining pressure on risk assets like Bitcoin.
Additionally, Thursday’s Bank of England’s interest rate decision will conclude the week’s series of economic events. The central bank is expected to keep rates unchanged, with U.K. inflation still high. However, unexpected moves like a rate cut could shake investor confidence.
