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"FOMC in Focus: Trump's Crypto Boost, Tech Earnings, and Inflation Uncertainty"

Coin WorldSunday, Jan 26, 2025 5:23 am ET

1min read

The upcoming week is set to be a pivotal one for the global economy, with several key events on the horizon. The Federal Open Market Committee (FOMC) meeting and the U.S. interest rate decision are expected to be the main attractions, with potential implications for the cryptocurrency market.

The cryptocurrency market has seen a surge in interest and trading activity following the return of Donald Trump to the White House. Trump's signing of several executive orders supporting the cryptocurrency market has sparked a renewed interest in the sector. The FOMC meeting and other major economic news events are expected to influence future trends in the market.

The U.S. 4Q earnings season is set to kick off, with major tech companies like Microsoft, Meta Platforms, Tesla, and Apple reporting their earnings. Analysts predict that these companies, along with three others, will see their earnings grow by more than 17% over the next year, almost double the 9% growth expected from the other 493 companies. Investors will be looking for more than just the usual profit and revenue numbers, given the high valuations of these companies.

The FOMC meeting is widely expected to keep the main interest rate unchanged at 4.25% to 4.50% on Wednesday. The Fed is waiting for more data to show that inflation is decreasing before making any changes. However, the uncertainty created by Trump's policies, such as tightening immigration and plans to raise import taxes, makes it challenging for the Fed to plan monetary policy. The Fed will need to balance current monetary policy with uncertainties about the future and decide how much to reveal about its outlook.

The U.S. Core Personal Consumption Expenditures (PCE) Price Index is expected to rise to 2.6% year-over-year on Friday, with the core PCE inflation rate staying stable at 2.8%. The overall PCE prices in the U.S. rose by 2.4% in November compared to last year, with the core PCE price index rising by 0.1%, the smallest increase in six months.

The European Central Bank (ECB) is expected to cut interest rates by 0.25% at its next meeting on 30 January, bringing the rate down to 2.75%. This would be the fifth rate cut since June 2024, aimed at supporting economic growth.

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