As the Federal Open Market Committee (FOMC) Meeting approaches, global financial markets are in a state of imminent volatility. Multiple factors are intertwined, bringing significant uncertainty to the markets.

The remarks from the Trump administration regarding changes in the Fed leadership, along with the lingering shadow of trade tariffs, have cast a pall over the market. More critically, important economic indicators such as the US Q2 GDP, July non-farm payroll data, and core inflation rate are about to be released in a concentrated manner, and this "data storm" will undoubtedly have a significant impact on the Fed's decision-making.

Economic data will become a barometer for the Fed's next actions. Although there are predictions that GDP growth may rebound to 2.4%, this is mainly due to a narrowing trade deficit, while the actual performance of domestic demand and manufacturing remains unclear. Signs of cooling in the labor market may appear, with new job creation in July expected to slow down and the unemployment rate possibly rising slightly. These factors may increase the Fed's inclination to cut interest rates. However, June's core PCE inflation may accelerate, partly due to tariff costs being passed on to consumers, which puts the interest rate cut decision in a dilemma.

Currently, the market generally expects the Fed to remain on hold. However, with the release of economic data, the situation may change rapidly. If the economic data is strong, employment is stable, and inflation is easing, the Fed is very likely to keep the current interest rates unchanged. Conversely, if GDP appears prosperous but is actually weak, employment is weak, and inflation remains high, calls for interest rate cuts will become stronger, which could significantly drive up the price of Bitcoin. If the various data points contradict each other, market volatility may increase sharply.

Cryptocurrencies are particularly sensitive to changes in policy. If the expectation of interest rate cuts becomes a reality, the cryptocurrency market may welcome multiple benefits: in a lower interest rate environment, investors may seek high-yield assets; a weakening dollar may drive up the prices of cryptocurrencies like Bitcoin; at the same time, increased economic uncertainty may prompt investors to view cryptocurrencies as a safe-haven asset.

Regardless of how the Federal Open Market Committee (FOMC) Meeting ultimately decides, the global financial markets in the coming week are bound to experience significant fluctuations. In this complex economic environment, investors need to closely monitor various economic indicators and policy trends, making prudent decisions to cope with potential severe market volatility.