Markets
US PCE Inflation Is 2.5%: What Does the Future Hold for the Cryptocurrency Market?
The global financial sector, not to mention the cryptocurrency market, was eagerly awaiting the PCE inflation data today. According to the latest data, inflation fell to 2.5% in June from 2.6% in the previous month. Notably, it is also in line with market expectations, but core inflation remained unchanged in June.
PCE inflation is at 2.5%
The Commerce Department recently released U.S. PCE inflation data, which showed that inflation cooled to 2.5% in June, down from 2.6% the previous month. Notably, the market had been expecting a similar inflation readings for june.
However, on a MoM basis, the Personal consumption expenditure (PCE) data came in at 0.1%, after being unchanged in May. The Core PCE Index showed inflation was unchanged at 2.6% from May, and rose above market estimates of 2.5%. On a monthly basis (MoM), the Core PCE Index came in at 0.2%, up from a 0.1% change in the previous month.
The cryptocurrency market seems to have reacted positively to the cooling inflation data, as evidenced by the current market performance. However, the mixed data seems to have fueled discussions about the Fed’s expected move with its benchmark interest rate plans.
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Will the cryptocurrency market continue to grow?
THE Cryptocurrency Market is up nearly 4% today, after a recent volatile trading week. It seems the latest mixed inflation data has further boosted market sentiment, which was already high today, amid the hype of the Bitcoin Conference 2024.
However, the Core PCE figure and the change in MoM have fueled discussion about the Fed’s stance on rate cuts. The market now expects the central bank to keep the interest rate unchanged at its July meeting, with a roughly 88% chance of a September rate cut, the CME FedWatch Tool showed.
Following the US PCE inflation data, the 10-year US Treasury yield fell 0.71% to 4.229. On the other hand, the US Dollar Index fell 0.02% to $104.105 at the time of writing.
Meanwhile, despite the mixed sentiment, the cryptocurrency market surged over 4% to $2.39 trillion today, indicating strong market confidence. Additionally, Bitcoin Price rose more than 5% to $67,300 today, while Ethereum Price rose more than 3% to $3,238.
In particular, the recent US GDP The data, which was better than market expectations, weighed on investor sentiment. The economy’s resilience against higher interest rates raised concerns that the Fed could stick to its base rate plans.
However, several market analysts are viewing the latest US PCE inflation data as positive. They are still betting on a September rate cut, despite it remaining above the Fed’s 2% target range.
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