Interest Rates and Tariffs: Crypto Markets Brace for a Volatile Week
By Giovane
July will come to a close in a major, event-packed week. From interest rate decisions to tariff negotiation deadlines, this week is promising to shape investor sentiment for the latter half of 2025.
Monday – Rising Notes
We began the week with reports of two short-term treasury note auctions in the U.S. Today, the US Department of Treasury held auctions for 2-year and 5-year treasury notes. 2-year notes came in at 3.920%, a sharp increase from June’s 3.786%. Meanwhile, 5-year notes followed through at 3.983%, also at an increase from last month’s 3.879%.
Higher yields suggest that investors are pricing in that interest rates will remain high, possibly due to inflation concerns or growing debt. And that will likely be a hint for what ot expect from the rest of the week.
Tuesday – Consumer Confidence
On Tuesday, the Conference Board will release its latest Consumer Confidence Index—a widely watched measure of how Americans feel about the economy. The report reflects views on jobs, business conditions, and spending plans, offering clues about where household demand may be headed.
Last month’s reading came in at 93.0, marking the second-lowest level this year. Markets now anticipate an uptick to 99.4, which would point to improving sentiment as inflation concerns ease and labor conditions stabilize.
Also, Tuesday will feature the first day of July’s FOMC meeting, as board members gather in Washington for their fifth policy meeting of the year.
Wednesday – U.S. GDP QoQ
In the middle of the week, we’ll get to take a look at the latest reading from the U.S. GDP for the second quarter. While still the first GDP revision, the data will give us an estimate of the inflation-adjusted change in the value of all goods and services produced.
Later, the Federal Reserve will announce its new (or old) interest rate decision, which will go into effect until September 17. Markets and analysts are heavily pricing that the Fed will opt for a “no change” policy, keeping interest rates at the current 4.25% – 4.50%.
This is one of, if not the, most important economic event of the month. An unlikely rate cut would certainly drive investors’ interest in risk markets like crypto and stocks even further. However, according to forecasts, we’ll likely see no rate cuts until September.
Also on Wednesday, the White House is expected to release a digital assets report. The potential for further insight into the U.S. Government’s plan regarding allocation and use of crypto could be a huge boost to market optimism moving forward.
Thursday – PCE Price Index
On Thursday, the Bureau of Economic Analysis will release the June reading of the Core PCE Price Index, the Federal Reserve’s preferred gauge of inflation. The month-over-month figure is forecast to rise by 0.3%, up from May’s 0.2%, suggesting a slight pickup in underlying price pressures.
Friday – Tariffs
To end the week, unemployment is forecasted to tick up a basis point from June’s 4.1%, while Manufacturing PMI inches closer to the 50-point threshold, signaling a potential shift toward expansion. ISM Manufacturing Prices, however, are expected to cool, dropping from 69.7 to 66.5, another hint that inflationary pressures might be easing.
Meanwhile, Donald Trump's tariff negotiations will finally come to a close. So far, the U.S. has made deals with major trading partners like Japan, Europe, and the United Kingdom, locking in 15% tariffs on most goods.
Brazil and Indonesia are currently at risk of receiving the harsher tariffs out of all nations, as high as 50% on goods.
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