The inflation and jobs data will play a crucial role in further market movements.
On Tuesday, August 29, the US Treasury yields continued to fall as Wall Street investors awaited the key economic data that will provide fresh insights into the state of the overall US economy. Investors will get fresh insights into the inflation data, the jobs data, and the labor market.
Wall Street Investors Waiting for Updates
The 10-year Treasury yield was slightly lower by over 1 basis point at 4.2% at 5:41 a.m. ET. Meanwhile, the 2-year Treasury yield had dipped by less than 1 basis point to 5.006%. It’s important to note that yields and prices have inverse movements, and a basis point signifies 0.01%.
Investors are preparing for a series of significant economic data releases that will provide insights into the latest developments regarding inflation and the job market.
This includes the JOLTS job openings figures for July scheduled for Tuesday, followed by ADP’s employment change data on Wednesday and nonfarm payrolls on Friday. Prior to that, the personal consumption expenditures price index, a favored inflation measure by the Federal Reserve, is anticipated to be released on Thursday.
These data points hold the potential to influence the Federal Reserve’s upcoming monetary policy decisions, adding to the current uncertainty surrounding them. Last week, Federal Reserve Chairman Jerome Powell indicated the possibility of future interest rate hikes. Speaking at the annual Jackson Hole symposium, Powell acknowledged that while inflation has decreased, it remains elevated. Powell said:
“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
End to the Interest Rate Hike Cycle, Bitcoin on the Sidelines
Previously, Fed Chair Jerome Powell stated that due to the stick inflation, there’s a possibility of a rate hike ahead. Numerous investors had held the expectation that the Federal Reserve’s July rate hike signaled the conclusion, or at least the approaching conclusion, of the central bank’s cycle of raising rates. This cycle commenced in March 2022 with the objective of reining in inflation to align with the Fed’s 2% target range and providing economic relief.
With inflation continuing to stay high along with strong job data, the interest rates might stay higher for longer than expected. After last week’s price drop to $26,000, Bitcoin investors too have been waiting on the sidelines to watch for the economic data. Any negative impact on Wall Street can create ripples in the crypto space as well.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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