bitcoin and cryptocurrencies, It awaits GDP data that will show the world’s largest economy likely narrowly escaped a recession in the second quarter.
GDP Data in the USA will be Announced at 15:30 CEST
According to FXStreet, the first data on second-quarter gross domestic product to be released by the US Bureau of Economic Analysis at 15:30 are expected to show that the economy grew 0.5% year-on-year, recovering from the 1.6% contraction in the first quarter.
The data is of great importance in that it reveals the damage caused by inflation, which has reached the highest level in the last 40 years in the USA, and that it can bring volatility to the markets.
Big data releases such as GDP and inflation spurred the market more than ever before as the central bank refrained from forward direction on Wednesday and ultimately tied its future policy moves to data.
The Fed defines forward steering as “a tool that central banks use to communicate to the public about the possible future course of monetary policy.”
Risky assets, including Bitcoin, could rise if GDP unexpectedly contracts for two consecutive quarters, confirming a technical recession.
The recession will bolster investors’ expectations for slower rate hikes and an eventual loosening of restrictions on the money supply.
VBL, author of the popular GoldFix & Bitcoin newsletter and podcast, said:
“Powell keeps saying ‘data-bound’, which is a sign that they’re worried about a recession, and if they do come up, they might pull back on rate hikes or QT (quantitative tightening or balance sheet reduction).
GDP will be released this week. If GDP comes in negative or very weak, stocks may indeed rally. “This will be a recession signal, the Fed won’t talk much and stocks may go higher until the Fed does.”
Bitcoin price also moves in parallel with stocks in general.
*Not investment advice.