US PCE Inflation Comes In At 2.5%, What’s Next For Crypto Market?

The global financial sector, let alone the crypto market, was eagerly waiting for the PCE inflation data today. According to the latest data, the inflation eases to 2.5% in June from 2.6% in the prior month. Notably, it has also come in line with the market expectations, but the Core inflation remained unchanged in June.

PCE Inflation Comes In At 2.5%

The Commerce Department has recently released the US PCE inflation data, which shows that the inflation has cooled to 2.5% in June, down from 2.6% in the prior month. Notably, the market was anticipating a similar inflation reading for June.

However, on a MoM basis, the Personal Consumption Expenditure (PCE) data came in at 0.1%, after remaining unchanged in May. The Core PCE Index showed that the inflation remained unchanged at 2.6% from May, and was up from the market estimates of 2.5%. On a month-over-month (MoM) basis, the Core PCE index comes in at 0.2%, up from the 0.1% change noted in the prior month.

The crypto market seems to have reacted positively to the cooling inflation figures, as evidenced by the current performance of the market. However, the mixed data seems to have fueled discussions over the Fed’s anticipated move with their policy rate plans going ahead.

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Will The Crypto Market Continue To Rally?

The Crypto Market rallied nearly 4% today, after a recent volatile trading over the week. It appears that the latest mixed inflation data has further boosted market spirit, which was already high today, amid the Bitcoin Conference 2024 buzz.

However, the Core PCE figure and the MoM change have fueled discussion over the Fed’s stance on their rate cut plans. Now, the market is anticipating the central bank to keep the interest rate unchanged at their July gathering, with about 88% odds of a September rate cut, the CME FedWatch Tool showed.

Following the US PCE inflation figures, the US 10-year bond yield fell 0.71% to 4.229. On the other hand, the US dollar index was down 0.02% to $104.105 during writing.

Meanwhile, despite the mixed sentiment, the crypto market rallied over 4% to $2.39 trillion today, indicating strong market confidence. In addition, Bitcoin price was up over 5% to $67,300 today, while Ethereum price soared over 3% to $3,238.

Notably, the recent US GDP data, exceeding the market forecasts, have weighed on the investors’ sentiment. The economic resilience against the higher interest rate has raised concerns that the Fed may remain stuck to its policy rate plans.

However, several market analysts are viewing the latest US PCE inflation data as positive. They are still betting towards a rate cut in September, despite it remaining higher than the Fed’s 2% target range.

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