Cryptocurrency markets are closely watching several key macroeconomic events in the U.S. this month, which could have a considerable impact on cryptocurrencies.
In particular, the Fed’s interest rate announcements will be a key data point in September. Favorable economic information usually has an impact on investor confidence in the cryptocurrency space. Over the course of the year, traditional financial markets have strengthened, making investors more optimistic about the broader economy, and vice versa.
This could influence risk appetite and ultimately affect interest in alternative assets, including cryptocurrencies.
U.S. Economic Events to Watch in September
Bitcoin (BTC) has further distanced itself from the psychological $60,000 level, maintaining its underperformance despite positive catalysts.
Factors such as increasing institutional adoption, a more positive regulatory backdrop, and expected rate cuts by the Federal Reserve (Fed) have done little to boost BTC’s price.
Bitcoin currently sits more than 20% behind its recent all-time high of nearly $73,500, reached more than five months ago. With the start of the new month, cryptocurrency market traders are keeping a close eye on key developments.
Especially since historical data shows that September has typically been Bitcoin’s lowest-performing period.
Nonfarm Payrolls, Unemployment Rates
Investors will be closely watching the upcoming U.S. nonfarm payrolls (NFP) report, which contains key data regarding job creation and the unemployment rate. The July report revealed lower-than-estimated job growth, with 114,000 jobs added.
This led to an average forecast of 162,000 for August. If the August NFP data is positive and the unemployment rate declines, the economy could rebound. Thus, it could positively influence investor sentiment towards cryptocurrencies.
Employment reports of this type can significantly affect market confidence, risk appetite, and general economic expectations. Ahead of the NFP report, data from the Job Openings and Labor Turnover Survey (JOLTS), to be released on Wednesday, will provide insights into the health of the labor market. A median forecast of 8.1 million job openings in July, down slightly from 8.18 million, could signal a growing economy, increased consumer spending and possible wage growth.
An average projection of 8.1 million job openings in July, slightly below the 8.18 million, could point to a growing economy, increased consumer spending and possible wage growth.
Separately, the ADP National Employment Report, due out Thursday, will provide a snapshot of private sector employment. If the July ADP report exceeds the 122,000 jobs previously added, it would indicate strong job creation and economic growth.
Debate Between Donald Trump and Kamala Harris
On September 10, Republican and Democratic presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming crucial campaign issues, this event may cause volatility in the Bitcoin and cryptocurrency markets in general.
Indeed, both parties have shown interest in cryptocurrencies, and Harris appears to be approaching pro-cryptocurrency policies. “They have said that one of the things they need are stable rules, rules of the game… focus on reducing unnecessary red tape and unneeded regulatory bureaucracy… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the game,” Bloomberg reported, citing Brian Nelson, a senior adviser to Vice President Harris’s campaign.
On the Republican side, Trump’s team is trying to position the U.S. as the cryptocurrency capital of the world. With both candidates trying to connect with the cryptocurrency community, the debate is expected to be high intensity, especially given Trump’s combative style and Harris’ record as a prosecutor.
U.S. Consumer Price Index (CPI)
U.S. Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. These data measure the rate of inflation through changes in the prices of consumer goods and services. In July, the CPI inflation rate was 2.9%, down slightly from the 3% recorded in June, according to the U.S. Bureau of Labor Statistics (BLS).
The August CPI data will be critical to see if inflation continues to decelerate, as the Federal Reserve has targeted a 2% inflation rate. If CPI falls below 2.9%, it would indicate that inflation is moving in the positive direction, which could reduce the burden on the Fed to continue to pursue higher interest rates. Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched.
Possible Bullish Effect
Previously, both have signaled a possible shift toward looser monetary policy as inflation shows signs of easing and the labor market normalizes. If their upcoming interventions demonstrate confidence that the disinflationary trend remains firm, it could be positive for the cryptocurrency market.
Currently, price pressures are easing across the economy, with declines in asset prices, lower housing cost increases and more modest wage growth contributing to a more general reduction in inflation, especially in the services sector. This trend, if prolonged, could have a positive influence on investor confidence, especially in riskier assets such as cryptocurrencies.
US Producer Price Index (PPI)
A day after the release of the CPI data, the U.S. Bureau of Labor Statistics will release Producer Price Index (PPI) inflation data. In July, the PPI registered a more notable easing than expected, providing relief to both stocks and Bitcoin. Notably, the U.S. PPI inflation rate moderated to 2.2% year-over-year in July, below the 2.3% expected and behind the revised 2.7% in the preceding period.
Similarly, core PPI inflation, which excludes food and energy prices, fell to 2.4% y/y in July, also below the 2.7% estimate and well below the previous 3.0%. If the August PPI data, which will be released on September 12, indicates a sustained decline in inflationary pressure, it could stimulate risk appetite among investors, which would favor assets such as Bitcoin and other cryptocurrencies.
Fed Interest Rates
Another key event this month will be the Federal Reserve’s interest rate decision on September 18. At its previous meeting, the Federal Open Market Committee (FOMC) agreed to keep interest rates unchanged, with policymakers voting unanimously to keep the benchmark overnight lending rate between 5.25% and 5.50%.
However, at a recent meeting, Fed Chairman Jerome Powell expressed growing confidence that inflation is on a sustainable path toward the Fed’s 2% target.
