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Bitcoin Traders Eye US Economic Data Amid Rising Geopolitical Tensions and Trump Trade Policy Risks
Crypto investors remain on high alert this week as key US economic indicators are poised to shape sentiment across digital asset markets. Following last week’s Consumer Price Index (CPI) report from the Bureau of Labor Statistics (BLS), traders are closely watching developments on the U.S. economic calendar for cues on potential Federal Reserve policy moves.
Amid ongoing geopolitical tensions in the Middle East and renewed volatility stemming from former President Donald Trump’s trade proposals, three major macroeconomic data points could prove pivotal for Bitcoin (BTC) and the broader crypto market this week.
1. U.S. Retail Sales
The US Census Bureau is set to release May’s retail sales figures, a crucial indicator of consumer spending—an economic driver that accounts for roughly 70% of U.S. GDP.
According to MarketWatch, retail sales rose by a modest 0.1% in April. However, economists are now forecasting a 0.6% month-over-month decline in May, pointing to potential weakness in consumer activity likely exacerbated by economic uncertainty tied to trade policy shifts.
If the data confirms or exceeds this projected decline, expectations for a Federal Reserve rate cut may intensify. Weaker consumer spending could be seen as justification for monetary easing, traditionally a bullish scenario for Bitcoin and other cryptocurrencies viewed as hedges against inflation or fiat currency debasement.
On the flip side, stronger-than-expected data—particularly if growth comes in flat or positive—could reinforce the U.S. dollar and dampen the Fed’s urgency to pivot, potentially putting downward pressure on crypto prices.
2. Initial Jobless Claims
Due to the Juneteenth holiday, the Department of Labor will release last week’s initial jobless claims report on Wednesday, a day earlier than usual. The report tracks the number of Americans applying for unemployment benefits for the first time—a timely pulse check on labor market health.
For the week ending June 7, jobless claims hit 248,000, surpassing the 242,000 forecast and marking the highest reading since October. Projections now point to a slight increase to 250,000 for the most recent week, further suggesting labor market softening.
As analyst Eye Zen Hour noted on X, “The labor market is CRACKING,” highlighting a multi-month trend of rising unemployment indicators. A deteriorating labor market could accelerate expectations for a Fed rate cut, offering support to Bitcoin’s bullish case.
3. FOMC Interest Rate Decision
The week’s central event is Wednesday’s Federal Open Market Committee (FOMC) interest rate decision. With inflation data showing an uptick in May—the first since February—the Fed faces pressure to balance its dual mandate of maximum employment and price stability.
According to the CME FedWatch Tool, markets currently assign a 96.7% probability that rates will remain steady at 5.25%-5.50%. Only a slim 3.3% chance is priced in for a quarter-point cut.
Still, any unexpected move—especially a surprise rate cut—could catalyze a sharp rally in Bitcoin. Lower interest rates reduce the appeal of interest-bearing assets, increasing demand for non-yielding stores of value like crypto.
Even absent a rate move, political pressure could weigh heavily on future Fed decisions. Trump has been vocal in urging Fed Chair Jerome Powell to slash rates, claiming on Truth Social that a full-point cut would reduce the government’s debt burden.
Market Outlook
As of this writing, Bitcoin is trading at $106,576, posting a 1% gain over the past two hours, according to BeInCrypto. Whether this momentum continues may depend largely on how this week’s economic data and policy signals align with market expectations.
