Fed Rate-Cut Hopes Fuel Crypto Rally Ahead of PCE Release
Markets surged on renewed Fed rate cut expectations after Chair Powell’s dovish speech sparked the largest cross-asset rally since April. Crypto traders led the charge: Ethereum (ETH) climbed to a four-year high, while gold gained 1%. Key events this week include Fed speakers Logan, Williams and Barkin, plus crucial US data: second-quarter GDP revisions, consumer confidence, Richmond manufacturing index and July core PCE inflation. With most participants anticipating a Fed rate cut next month, the US dollar index remains under pressure against hawkish central bank currencies. Traders will watch core PCE data closely for signs of persistent inflation. Although a Fed rate cut appears imminent, the future easing path is uncertain, making this week’s economic calendar vital for assessing market direction.
Bullish
Powell’s dovish tone reinforced expectations of an imminent Fed rate cut, mirroring past rallies after easing signals. Lower interest rates typically weaken the US dollar index, boosting risk assets like Ethereum. This week’s core PCE data will test inflation trends, but current sentiment favors further gains in crypto. In the short term, traders may ride the bullish momentum driven by rate-cut hopes and subdued dollar. Over the long term, if PCE surprises on the upside, volatility could spike. However, the prevailing Fed rate cut narrative remains supportive for crypto bulls.