Bitcoin (BTC) continues to display limited volatility this week, lingering around the $77,000 mark during morning trading in the U.S. On the economic front, data released on Friday painted a concerning picture, as the University of Michigan Consumer Sentiment Index for May plummeted to a record low of 44.8, down from 48.2 in the previous month and falling short of economists’ forecasts that had predicted stability at 48.2.
In tandem with this decline, the Expectations Index also dropped to a staggering low of 44.1. Concerning inflation trends, the UMich 1-year Consumer Inflation Expectations Index rose to 4.8%, up from 4.5%, while the 5-year Inflation Index showed an increase to 3.9% from 3.4%. This latest batch of data presents a grim narrative of stagflation that is challenging incoming Federal Reserve chairman Kevin Warsh.
Warsh, appointed by President Trump, is expected to steer the central bank towards cutting interest rates. However, the ongoing conflict in Iran has caused a spike in oil prices, complicating the inflation landscape that had previously shown signs of cooling. In response to these developments, market analysts are projecting more than a 70% likelihood of one or more interest rate hikes by the end of 2026.
Warsh is scheduled for his official swearing-in at 11 am ET. Meanwhile, U.S. stock markets are experiencing modest gains as traders prepare for the upcoming three-day weekend, with the Nasdaq climbing by 0.3% and the S&P 500 up by 0.4%.
