Breaking: US PCE Inflation Data Aligns with Forecasts, Bitcoin Under Pressure
Highlights
- The annual PCE inflation rate rises to 2.5% from 2.4%, but slows to 0.3% from 0.4% last month.
- Bitcoin to remain under pressure as Fed Chair Jerome Powell to speak later.
- Analysts are bullish on Bitcoin price making new all time high soon.
The U.S. Federal Reserve’s (Fed) preferred inflation gauge PCE comes in hot for February but in line with market estimates, as per the latest PCE report by the U.S. Bureau of Economic Analysis. Now, we officially have rising CPI, PPI and PCE inflation. Meanwhile, Bitcoin price remains under pressure ahead of Fed Chair Jerome Powell speech later today.
The PCE inflation in the US slows to 0.3% month-over-month in February, following a 0.4% rise in January. Also, the monthly core PCE index, which excludes food and energy, came in at 0.3%, slowing from a 0.5% increase in the previous month.
On the other hand, the annual PCE rate rises to 2.5% from 2.4%, which was the lowest since February 2021. Also, the annual core PCE inflation came in line with estimates at 2.8%, low than last month’s 2.9%.
Wall Street giants including JPMorgan, Bank of America, UBS, Morgan Stanley, Citigroup, Deutsche Bank, Nomura, RBC, Barclays, Goldman Sachs, TD Securities, and Wells Fargo anticipated inflation to cool in the coming months. However, JPMorgan Chase CEO Jamie Dimon said the Fed needs to wait longer before cutting interest rates, most probably after June.
Amid Wall Street estimates mostly in line with market consensus, Fed Chair Jerome Powell’s expecting three rate cuts in 2024. CME FedWatch shows a 61% chance of Fed rate cuts in June, with May off the table. Moreover, there is 49% probability of a further 25 bps rate cut in September.
The US dollar index (DXY) moves above 104.50 on Friday, rising continuously since the start of the month. Moreover, US 10-Year Treasury yields (US10Y) pared some gains to trade around 4.20% after the PCE inflation report offered investors some relief about inflationary pressures, and reinforced bets the Fed will start cutting interest rates soon. Bitcoin price typically moves in the opposite direction to the US dollar and US treasury yield.
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Bitcoin Price to $75K After $15 Billion Options Expiry
The crypto market saw the largest Bitcoin and Ethereum options expiry, with leading crypto derivatives exchange Deribit settling over $15 billion in BTC and ETH options.
BlackRock stated investors are focused ‘overwhelmingly’ on Bitcoin over other cryptocurrencies. Bitcoin ETFs continue to see massive inflows daily, with 182.8 million net inflow on Thursday. GBTC outflows are also falling as FTX and Genesis sold their holdings.
Moreover, top analyst Markus Thielen is bullish on Bitcoin price rising above $100K and reaching $140K after the bitcoin halving. In the last post on X, he said a potential 12% rally for the cryptocurrency awaits in April. The prediction was based on Bitcoin’s historical performance in April.
BTC price shows volatility, with the price currently trading at $69,434, a 1.79% dip from the day’s high. The 24-hour low and high are $69,076 and $71,063, respectively.
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