Crypto Market This Week: US-Iran Truce, CLARITY Act Vote, FOMC Meeting, PCE Inflation

The crypto market this week is awaiting updates on the US-Iran truce, CLARITY Act, the Federal Reserve’s interest rate decision, U.S. PCE inflation and jobs data. The July 29 FOMC meeting, the Senate’s push on the CLARITY Act, and the June PCE inflation report are among the biggest events on traders’ radar.

US-Iran Diplomacy Offers Relief To Crypto Market

After the Iranian government said indirect communication with the U.S. is continuing through mediators, risk appetite got better. The diplomatic moves follow a truce in U.S. airstrikes, during which both sides have refrained from new attacks for a third day.

Iranian Foreign Ministry’s spokesman Esmaeil Baghaei said mediation efforts have continued and messages are being exchanged via intermediaries. However, he charged that Washington was hurting efforts to restore the diplomatic process. Baghaei noted that Iran had met its obligations under a Memorandum of Understanding before new strikes were launched.

It was the “third time in the past year” that Iran’s diplomatic efforts had been “betrayed” in negotiations, Baghaei said.

Ambassador to the United Nations Mike Waltz gave a clear explanation to Trump’s decision to end the bombing campaign. “He’s giving talks some space, he’s giving it a little bit of room,” he said, according to FOX News. Another top official in the administration has said that Trump is still pushing for a diplomatic solution and imposing pressure on Tehran.

CLARITY Act Heads Toward Critical Senate Vote

The crypto market is also eyeing the next move as Senate Majority Leader John Thune intends to get the CLARITY Act to the floor of the Senate before the start of the August recess.

As CoinGape reported previously, Thune said that he would like to see a vote regardless of whether the bill has 60 votes or not. “I would like to at least get Clarity started. We’ll see where the votes are,” Thune stated.

An earlier version of the Digital Asset Market Clarity Act was introduced and passed by the House. Meanwhile, an amended version was approved by the Senate Banking Committee. In a combined Banking and Agriculture Committee draft that was released this week, ethics provisions were also included. These include temporary restrictions on the issuance or sponsorship of digital assets by top federal officials.

The CLARITY Act has little chance of passing before August recess with only 0.6% odds of passage by August 1 on Kalshi. The Republicans have a Senate majority of 53 to 45, so several Democrats probably would have to vote for the bill. A coalition headed by Sen. Angela Alsobrooks has said the current plan is not as consumer-friendly or anti-money laundering robust.

Fed Rate Decision In Spotlight

This week’s key macro event for the crypto market will be the Federal Reserve’s decision on monetary policy on July 29. The probability built into futures markets is 62.1% that the fed funds target range is to remain at 3.50%-3.75%, according to data from CME FedWatch tool. Meanwhile, traders see a 37.9% chance of a 25-basis-point increase to 3.75%-4.00%.

Markets will also be listening for any indications by Fed Chair Michelle Warsh in a post-meeting press conference about the policy direction the central bank is going to take during the next few months.

PCE Inflation & GDP Data Due After FOMC

The economic calendar is still full after the Fed meeting. The second quarter GDP, weekly jobless claims, personal income and expenditures data, and June Personal Consumption Expenditures (PCE) inflation data will be released to investors on Thursday.

Economists estimate that headline PCE inflation will jump 0.4% for June after a -0.1% May reading. Whilst, the annual PCE inflation rate is projected at 4.1%. The Fed’s preferred gauge of inflation, core PCE, is expected to rise 0.3% from the previous month and 3.4% from a year ago.

On the other hand, the U.S. initial jobless claims data is expected to rise to 203,000, a significant increase from last week’s figure of 187,000. It could prove to be bullish for the crypto market as it hints at a dovish stance from the Fed owing to a weakening labor market.