Key Economic Indicators To Watch This Week: US Elections, Fed and BoE Rate Decisions, Bitcoin’s New ATH

Key Takeaways

• Donald Trump and Kamala Harris will find out who’ll run the White House this week.
• The Bank of England is anticipated to lower interest rates by a quarter-point to 4.75%.
• The crypto market is seeing new increases amid the outcome of the U.S. vote.

With the U.S. presidential election entering its final days, Vice President Kamala Harris and former President Donald Trump are running neck and neck in a tight race.

Meanwhile, investors are also bracing for two major events: the Bank of England’s interest rate decision and the potential impact of the U.S. election outcome on the crypto market.

Focus On U.S. Elections

With less than 24 hours to go before Americans head to the polls, polls confirm an astonishingly close contest between Harris and Trump.

A recent projection by ABC News and Ipsos  puts the Vice President ahead by a slender three points, with 49% of likely voters backing her candidacy versus 46% for Trump.

The final pre-election survey, conducted from Oct. 29 to Nov. 1, underscores the razor-thin margin separating the two candidates.

This finding aligns with recent polling trends, which have shown a seesaw battle. Last week, a similar poll had Harris ahead by four points, 51% to 47%, while two weeks ago, she trailed Trump by two points.

Fed Expected To Cut Rates

This will also be the Federal Reserve week as, on Thursday, Nov. 7, the U.S. central bank is expected to cut its rates by 25 basis points.

This expectation stems from uncertainty surrounding the economic outlook and the potential impact of recent banking sector turmoil.

Traders have fully priced  in this quarter-point cut, which would bring the federal funds rate to the 4.50%-4.75% range. Moreover, the market has baked in an 83% probability of a similar-sized rate reduction in December.

Economists  forecast a more aggressive easing cycle, projecting four consecutive rate cuts in the first half of 2025, culminating in a terminal rate of 3.25%-3.5%.

However, experts acknowledge significant uncertainty regarding both the pace of cuts next year and the ultimate destination for interest rates.

BoE May Also Slash Rates

The Bank of England is also expected to lower interest rates  this week, though markets now anticipate fewer cuts next year after forecasts suggested the new government’s Budget could push inflation higher.

Analysts predict the Monetary Policy Committee (MPC) will vote to reduce the base rate by a quarter-point to 4.75% at Thursday’s meeting.

Hopes for a cut were bolstered by recent data showing inflation dropped to 1.7%, its lowest since April 2021, alongside a decrease in services inflation.

Wage growth has also eased, with average pay growth, excluding bonuses, falling to 4.9%.

The Bank last cut rates in August but held steady in September. With inflation expected to rise due to increased energy costs and oil price pressures, another cut in December seems unlikely.

Markets now foresee fewer than four rate cuts next year, down from nearly five anticipated before the Autumn Statement.

Possible New ATH For Bitcoin

In a dramatic surge, Bitcoin  jumped 8% last week, briefly threatening to eclipse its all-time high.

The leading cryptocurrency’s value flirted with $73,000 as market optimism grew around a potential Trump victory.

Crypto enthusiasts are now betting on Bitcoin to set a new record, surpassing its March peak, in the final days leading up to the election.

After a rapid $2,000 increase in just a few hours, Bitcoin has settled into a range between $71,000 and $73,000, with October—or “Uptober” as it’s known in crypto circles—delivering a 12% gain.

The wider crypto market has shown similar gains this week. Ethereum and Solana rose by 4% and 5%, respectively.

Dogecoin—a memecoin closely associated with Elon Musk—soared by 23% after Musk mentioned it at several Trump rallies.