- The Federal Reserve will publish minutes of its last meeting on Wednesday.
- The US will release the latest consumer price index (CPI) data on Thursday.
- Cryptocurrencies like Cosmos, Gala, and Conflux have recoiled recently.
Cryptocurrency prices recoiled on Wednesday morning even as American stocks jumped and bond yields slipped. The Dow Jones, Nasdaq 100, and Russell 2000 have risen by more than 1%.
Cryptocurrencies like Cosmos, Conflux, Gala, and Bitcoin SV were among the worst performers, falling by more than 5% in the past 24 hours. This price action happened as Bitcoin price lost the important support level at $27,200.
Meanwhile, the US dollar index (DXY) and American bond yields have pulled back in the past few days. The DXY retreated from last week’s high of $107.2 to $105.3 while the 10-year and 30-year yields have dropped to 4.63% and 4.79%, respectively.
The next important catalyst for these assets will be the upcoming Federal Reserve minutes and the US inflation data scheduled for Thursday. The minutes will provide more information about what to expect in the coming meetings.
In the last meeting, the Federal Reserve decided to leave interest rates unchanged between 5.25% and 5.50%. The dot plot pointed to another 0.25% rate hike, spooking investors.
Since then, mortgage rates have jumped to over 8% while long-term bond yields soared to the highest level in decades. The TLT and VGLT ETFs, which track these bonds tumbled to their lowest levels in over two decades.
Federal officials have pointed to another pause in the coming meeting. In a statement this week, Fed’s vice chairman said that the bank would consider leaving rates intact this week. He cited the fact that financial conditions had tightened substantially in the past few months.
The other important catalyst that could move cryptocurrencies like Cosmos, Conflux, Gala, and Bitcoin SV will be the upcoming US inflation data scheduled for Thursday. Economists polled by Reuters expect the data to show that the headline consumer price index (CPI) dropped from 3.7% in August to 3.6% in September even as gasoline prices rose.
US inflation numbers are important because they have an impact on interest rates. Higher inflation figures mean that the Fed will maintain a hawkish tone, making short-term bonds more attractive to investors.
