Breaking: US PCE Inflation Soars 2.7%, Bitcoin Price Holds Steady

Highlights

US PCE inflation jumps to 2.7%, raising concerns over Fed policy.
Bitcoin holds steady despite disappointing US GDP growth and inflationary pressures.
Market sentiment dampens as investors await Fed's response to inflation data.

The crypto market was eagerly waiting for the March Personal Consumption Expenditures (PCE) inflation data for cues on the current economic health in the U.S. Notably, according to the Bureau Of Economic Analysis, the PCE Inflation for March rose 0.3% on a monthly basis, in line with the Wall Street expectation.

Meanwhile, the anticipation over the PCE inflation data has further intensified after the latest economic data painted a gloomy picture while dampening the investors’ sentiment. For context, the latest U.S. Gross Domestic Data (GDP) data for the first quarter, released on Thursday, April 25, has weighed on the global market sentiment.

U.S. PCE Inflation Rose 2.7%

The latest data from the Bureau Of Economic Analysis showed that PCE inflation for March rose 0.3%, following a similar surge in the prior month. Notably, the market was also expecting a similar advancement of 0.3% on a month-over-month (MoM) basis for the month.

However, on a yearly basis, the PCE inflation soared 2.7%, after increasing 2.5% in February and more than the market expectations of 2.6%. Besides, the Core PCE inflation, excluding the food and energy prices, rose 0.3% on a MoM basis and 2.8% on a yearly basis.

Notably, the market was also expecting the core PCE inflation to surge 0.3% monthly. On a year-over-year (YoY) basis, the anticipation was 2.7%. Meanwhile, the hotter-than-anticipated inflation data has further weighed on the market sentiment, fuelling concerns over a further delay in the Federal Reserve’s policy rate cut plans.

For context, the U.S. Federal Reserve has kept the inflation higher to rein the inflation, which has so far forced many investors to stay on the sideline. In addition, the recent hawkish comments from the Fed officials signaled a potential delay in their rate cut plans, as the inflation still stayed above their 2% target range.

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Bitcoin and Crypto Market Holds Steady

Recently, the US economy faced disappointment as first-quarter GDP growth fell short at 1.6%, below the anticipated 2.5%, triggering concerns about inflationary pressures and market instability. The Bureau of Economic Analysis revealed the subdued figures, intensifying worries amid the Core PCE Price Index’s unexpected surge from 2.0% to 3.7%, and PCE inflation data rising from 1.8% to 3.4% in Q1. Notably, such inflationary spikes raised fears of a looming hawkish stance from the Federal Reserve.

Besides, the investors’ confidence plummeted as cryptocurrency prices also suffered following yesterday’s GDP release. In addition, expectations of a postponed rate cut by the Fed shattered recent gains in Bitcoin and other cryptocurrencies, indicating a challenging path ahead for digital asset markets. As inflation concerns grip the economy, uncertainty looms over future Fed policies and market stability.

Meanwhile, following the PCE inflation data, the U.S. 10-year Bond Yield fell 0.83% to $4.669, while the U.S. Dollar Index Futures jumped 0.13% to $105.590. However, the Bitcoin price holds steady at $64,369.85, up 1% from yesterday. Simultaneously, the global crypto market cap also noted a surge of 0.48% to $2.36 trillion at the same time.

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Rupam Roy

Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam's expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news. Rupam's career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.

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