Bitcoin secured its first weekly close above the $80,000 mark since early May 2026. This closing level sets the stage for the crypto market ahead of a crucial week for U.S. monetary policy. Market participants are eyeing Thursday’s Producer Price Index (PPI) report and August’s Consumer Price Index (CPI) on Friday. Both inflation gauges will reset market expectations ahead of the Federal Reserve meeting on September 16.
Inflation grew 0.1% month-over-month and 3.4% year-over-year last month, matching market forecasts. While price growth aligned with targets, central bank officials remain cautious. Speaking at the Jackson Hole symposium in late August, Fed Chair Kevin Warsh stressed that summer data did not yet offer compelling evidence of an improvement in underlying inflation trends.
Rate Bets and Political Pressure
The August U.S. jobs report gave the Fed fresh reason to delay monetary easing. Latest figures showed 162,000 new jobs added, well above the expected 56,000 positions, alongside upward revisions for prior months. A resilient labor market weakens the case for the central bank to cut interest rates.
Probabilities on the CME FedWatch Tool quickly reacted to the jobs data. Market consensus now assigns a 58.4% chance that the central bank will raise interest rates by 0.25% at its September 16 meeting. Higher borrowing costs typically dampen investor risk appetite for speculative assets like cryptocurrencies, while looser monetary policy tends to provide tailwinds.
On Truth Social, Donald Trump exerted direct pressure over interest rate policy. “The Fed Board must be smart - BE A PATRIOT. High interest rates are hurting the USA,” he posted, pressing the monetary authority.
Pressure from Asia and the Fourth-Quarter Effect
In Asia, Japan’s government maneuvers also impacted capital flows. The country executed a record currency intervention, marked by a $79.57 billion decline in foreign exchange reserves compared to late July. The move pushed the yen stronger to 155 against the U.S. dollar.
Amid the high-interest-rate outlook, Musaic Asset Company offered a contrasting view. They noted that strong U.S. labor absorption serves as a catalyst safeguarding corporate earnings, thereby supporting the continued equity bull market going forward.
This slate of macro data unfolds in September - a month historically known as the worst period for equities. Compounded by the upcoming midterm elections in November, the Fed’s decision next week will be a pivotal factor steering Bitcoin’s volatility throughout the fourth quarter.
Source: Cointelegraph.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
