PCE, jobless claims and housing data test Fed cut hopes: Crypto Week Ahead
TL;DR
Next week, key U.S. economic data on inflation, jobless claims, and housing will influence Fed rate cut expectations. Current predictions suggest rates will remain unchanged in June.
Key points
- U.S. economic data on inflation, jobless claims, and housing is upcoming.
- Prediction markets suggest Fed rates will remain unchanged in June.
- The Middle East war is impacting oil prices and inflation risk.
- Higher energy costs could affect the sustainability of softer inflation.
- Rising energy costs may negatively impact risk assets.
The coming week appears to be macro-led, with U.S. economic data carrying the main calendar risk. Inflation, growth, jobless claims and housing numbers all land before the open, giving markets insight on whether the Fed has room to cut rates.
Prediction markets and the CME’s FedWatch tool currently point to rates remaining unchanged in June’s meeting.
The data comes amid the ongoing Middle East war, which keeps oil prices and inflation risk in focus. Any move higher in energy costs could make softer inflation harder to sustain and weigh on risk assets.
What to Watch
(All times ET)
- Crypto
- May 26–June 1: Kevin Warsh officially begins his first week as Federal Reserve Chair following his confirmation.
- Macro
- May 26, 08:00 a.m.: U.S. S&P/Case-Shiller Home Price YoY for March est. 1.1% (Prev. 0.9%)
- May 26, 08:00 a.m.: U.S. House Price Index YoY for March est. 1.8% (Prev. 1.7%)
- May 26, 09:00 a.m.: U.S. CB Consumer Confidence for May est. 92 (Prev. 92.8)
- May 26, 08:30 p.m.: Australia Consumer Price Index YoY for April est. 4.4% (Prev. 4.6%)
- May 27, 08:00 p.m.: Bank of Korea Interest Rate Decision (Prev. 2.5%)
- May 28, 04:00 a.m.: Eurozone Economic Sentiment for May est. 92 (Prev. 93)
- May 28, 07:30 a.m.: U.S. PCE Price Index YoY for April (Prev. 3.5%); Core PCE (Prev. 3.2%)
- May 28, 07:30 a.m.: U.S. Initial Jobless Claims for period ending May 23 est. 212K (Prev. 209K)
- May 28, 08:00 a.m.: South Africa Reserve Bank Interest Rate Decision est. 7.0% (Prev. 6.75%)
- May 28, 09:00 a.m.: U.S. New Home Sales for April est. 0.67M (Prev. 0.682M)
- May 28, 03:30 p.m.: U.S. Fed Balance Sheet for period ending May 27 (Prev. $6.713T)
- May 28, 06:30 p.m.: Japan Tokyo Consumer Price Index YoY Prel for May (Prev. 1.5%)
- May 29, 07:30 a.m.: Canada GDP Growth Rate Annualized for Q1 (Prev. -0.6%); QoQ (Prev. -0.2%)
- May 29, 08:45 a.m.: U.S. Chicago PMI for May est. 49.5 (Prev. 49.2)
- May 30, 08:30 p.m.: China NBS Manufacturing PMI for May est. 50.5 (Prev. 50.3)
- Earnings
- Nothing scheduled.
Token Events
- Governance Votes & Calls
- Compound DAO is voting on a proposal to update Compound III supply caps for USDC, USDT, and WETH across Optimism, Polygon, and Unichain. Voting ends on May 25.
Q&A
What economic data is being released next week that could affect Fed rate cuts?
Next week, U.S. economic data on inflation, jobless claims, and housing will be released, which could impact Fed rate cut decisions.
What do prediction markets indicate about Fed rate changes in June?
Prediction markets and the CME’s FedWatch tool indicate that rates are expected to remain unchanged during the June meeting.
How could the ongoing Middle East war impact U.S. inflation and economic data?
The ongoing Middle East war could lead to higher oil prices, increasing inflation risk and potentially affecting the sustainability of softer inflation.
What are the potential consequences of rising energy costs on risk assets?
Rising energy costs could make it harder to maintain softer inflation, which may weigh negatively on risk assets.
