Crypto Market Awaits US PCE Data as Odds of 3 Fed Rate Hikes Spook Investors

The crypto market is eagerly waiting for the upcoming US PCE inflation data, amid soaring bets over potential rate hikes by the US Federal Reserve. According to the latest reports, the US Fed is expected to raise the policy rate three times this year, which has already weighed on the investors’ sentiment.

Besides, the hawkish hints from the new Fed Chair, Kevin Warsh, have further spooked the market, fueling discussions over the potential next move of the US Central Bank. So, here we explore what to expect from the upcoming US PCE inflation data and its likely impact on the Fed’s monetary policy plans.

US PCE Inflation in Crypto Market Focus, What to Expect?

The crypto market has gone through a topsy-turvy scenario over the past few days, amid geopolitical and macro tensions. The US-Iran war has bumped up the prices, triggering inflation and fears of the Fed’s hawkish monetary policy.

Having said that, the crypto market participants are now eagerly waiting for the upcoming US PCE inflation data for cues on the economic health. The data, which the US Fed examines to gauge inflationary pressures, is scheduled to be released on June 24, before the market opens.

According to market estimates, the US PCE inflation is expected to soar 0.5% on a monthly basis in May, following a 0.4% jump in April. On an annual basis, the surge is expected to come in at 4.1%, as compared to 3.8% in the prior month.

The core PCE inflation is also expected to surge 0.3% on a monthly basis and 3.4% over the last 12 months. Notably, if the inflation readings further exceed the already high estimates, it could further trigger the Fed rate hike fears among traders and impact the broader financial sector.

Meanwhile, the latest US CPI inflation data came in tandem with the market forecast. This has also helped in a temporary rebound in BTC price.

Market Bets on Three Fed Rate Hikes

The crypto market is also bracing for renewed volatility ahead amid expectations of tighter monetary policy by the US Federal Reserve. For context, the market is now increasingly pricing in the possibility of three US Fed rate hikes this year, which could significantly impact Bitcoin as well as the broader digital assets space.

Notably, the higher interest rates have historically impacted the risk-bet appetite of the investors, potentially impacting the crypto sector. Amid this, a latest report showed that Bank of America now forecasts three rate hikes in 2026, reversing its earlier expectation of no policy changes.

Meanwhile, the revision reflects resilient economic data and a more hawkish stance from the Federal Reserve under Chair Kevin Warsh. It also signals that policymakers remain focused on curbing inflation despite market uncertainties. Notably, the Fed has kept the policy rates unchanged at its latest FOMC meeting.

In addition, prediction markets also highlight lingering ambiguity over the Fed’s near-term trajectory. Kalshi data suggests a 25% probability of a rate hike in July, compared to a 76% likelihood of a pause and a marginal 2% chance of a rate cut.

Simultaneously, the CME FedWatch Tool showed that the Fed may keep the interest rate unchanged at their July meeting, with a 51.9% odds of a 25 bps rate hike in September.

Considering that, the investors would keep a close track of the upcoming US PCE inflation data to examine the potential next move of the US central bank.