Key Economic Indicators to Watch This Week: US CPI Data, Wall Street Earnings, FOMC Minutes

Key Takeaways

• U.S. inflation data and FOMC minutes release are the main economic events to monitor this week.
• Also, Wall Street’s third-quarter earnings will capture investors’ attention.
• How will the crypto market react?

A pivotal week looms for investors as a barrage of critical economic data and central bank minutes threaten to upend markets.

From the keenly watched U.S. CPI report to a slew of high-stakes earnings releases and the latest FOMC minutes, investors will be scrutinizing every data point for clues on the economy’s trajectory and the Fed’s next policy move.

What To Monitor?

U.S. Inflation Numbers

This week’s economic calendar is packed with market-moving events, but Thursday’s (Oct. 10) September CPI data takes center stage.

The market expects inflation to continue its moderating trend, capping off a quarter that’s seen a welcome easing of price pressures.

The impact of this data will be amplified by stronger-than-expected jobs report , which is likely to influence expectations around the timing and magnitude of future Federal Reserve interest rate cuts.

Friday’s PPI data is also expected to reinforce the cooling inflation narrative, bolstering the Fed’s confidence that price pressures are returning to its 2% target.

This could have significant implications for the central bank’s policy trajectory, particularly in light of last month’s 50-basis-point rate cut.

The Fed’s “dot plot suggests that many experts anticipate 50-75 basis points in cuts by year-end, implying only 0-25 basis points of additional reductions this year.

However, the robust jobs report may prompt the central bank to reconsider the pace of its easing cycle. Will the Fed opt for a less aggressive cut in November? Markets will be watching closely for clues.

FOMC Minutes

The Federal Reserve will release the minutes of its September meeting on Wednesday, Oct. 9, offering investors a rare glimpse into the deliberations behind last month’s 50-basis-point rate cut.

Markets will analyze the minutes for clues on the Fed’s future easing plans, including the factors that swayed policymakers to take bold action.

Several Fed officials, including Neel Kashkari, Raphael Bostic, Adriana Kugler, and Lorie Logan, will also offer their insights during the coming week.

Wall Street Earnings

The U.S. third-quarter earnings season kicks off in earnest this week, with Wall Street’s biggest banks and financial institutions set to report.

JPMorgan Chase, Wells Fargo, and BlackRock will unveil their quarterly results on Friday, Oct. 11, providing crucial insights into the health of the economy and the impact of the Federal Reserve’s recent rate cuts.

Bank earnings are key indicators of economic health, particularly regarding loan demand strength.

Investors will also seek evidence that the Federal Reserve’s recent rate cuts have boosted economic activity, such as increased auto sales or other big-ticket purchases. Other companies reporting this week include PepsiCo and Delta Air Lines.

Optimistic investors are hoping for robust earnings to justify the stock market’s rising valuations. The S&P 500 has gained 20% this year and is nearing record levels despite recent volatility sparked by geopolitical tensions in the Middle East.

UBS equity strategists predict a 4.7% year-over-year increase in S&P 500 earnings for the third quarter, but factoring in the usual pattern of positive earnings surprises, the actual growth could be closer to 8.5%.

Potential Crypto Market Reaction

Even if not strictly correlated to the crypto market, digital asset investors are wondering how cryptocurrencies will react to these events.

Ethereum’s price is around $2,500 and on an upward trajectory. Analysts expect more upside, but the descending resistance could stop the rise by around $2,620.

Crypto’s reigning king, Bitcoin, has a bullish long-term trend, and a breakout from its long-term pattern is likely. Whether BTC breaks out above $63,980 or gets a rejection will likely determine the short-term trend.

Market analyst Bepi Pezzulli told CCN: “The latest inflation data and Wall Street earnings could certainly impact crypto markets, as they often reflect broader economic sentiment. Higher inflation might lead to expectations of further interest rate hikes, which generally tighten liquidity and could push investors away from riskier assets like crypto.”

“On the other hand, if earnings show resilience or signal future growth, risk appetite could rise, driving up demand for crypto as investors seek higher returns. The volatility in crypto could be heightened by both factors, making it a potentially pivotal week.”