Positive economic revisions hint at stable cryptocurrency trends ahead.
As Apple announces the iPhone 17, the cryptocurrency market experiences a downturn, with major financial institutions sharing their current outlook in a week marked by the release of inflation data. Despite promising technology advancements, altcoins are maintaining a steady course, while Bitcoin $0.000017 records a 1% loss.
ContentsEconomic ProjectionsCryptocurrency Outlook Economic Projections
Goldman Sachs projects a 0.3% monthly increase in the Consumer Price Index (CPI), aligned with their forecasts for a 0.29% rise in core Personal Consumption Expenditures (PCE) for August. This expected increase suggests that the impact of tariffs on inflation will remain minimal, especially as global tariffs began last month with varying rates for each country, having been in effect since February. Thus, potential inflationary spikes are likely to diminish.
Key trends influencing the August CPI report include a 1.2% increase in used car prices due to rising auction prices, a 0.2% increase in new car prices resulting from lower dealership incentives, a 0.4% rise in vehicle insurance premiums, and a 3% increase in airline tickets due to seasonal disruptions and high base fares. Categories such as communication, household items, and entertainment are expected to contribute 0.14 points to core inflation due to tariff influences.
In the coming months, it is anticipated that tariffs will support monthly inflation (~0.3%), while the impact from housing rent and labor markets decreases, moderating core trend inflation. By 2025 year-end, core CPI is projected at 3.1% and core PCE at 3.2% (excluding tariffs, both measures are expected to be +2.3%).
Falling energy prices support these projections, with expectations rising for a 50 basis point interest rate cut by the Federal Reserve.
Cryptocurrency Outlook
Fitch Ratings recently revised its global Gross Domestic Product (GDP) forecasts upward, which is beneficial for cryptocurrencies by mitigating the global recession risk and easing the global disaster scenario that had intensified in recent months. Nevertheless, central banks, led by the European Central Bank and with the Federal Reserve holding, are anticipated to cease rate cuts.
Moreover, the likelihood of a dollar recovery appears weak, suggesting that cryptocurrencies may maintain a stable, upward trajectory in the upcoming period.
In summary, if the employment easing confirmed by last week’s Bureau of Labor Statistics revision combines with a slow inflation increase, it could pave the way for a new rising phase for cryptocurrencies starting on Friday. The Producer Price Index (PPI) data released tomorrow will be crucial in this context.
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