The main title The Bureau of Economic Analysis announced on Friday that US PCE Inflation 2.6% inflation has climbed for three consecutive months, reaching 2.6%. In addition, the US core PCE inflation rate remained unchanged at 2.8% in December from November, which is an unexpected development.
Analysts and investors are predicting more price increases for stocks and BTC Price Outlook in the next months, thus the price of these assets is beginning to rise again. Of particular note is the fact that the U.S. Federal Reserve raised its economic predictions for 2025, increasing the core PCE inflation forecast from 2.2% to 2.5% and the annual PCE inflation forecast from 2.1% to 2.5%.
US PCE Inflation Comes in At 2.6%
The US PCE data, which is the favoured inflation gauge of the Federal Reserve, was released on January 31 by the US Bureau of Economic Analysis. Consistent with expectations, the annual PCE rises to 2.6% from 2.4% in the previous month. Inflation increased 0.3% month-over-month following a 0.1% gain the month before. The yearly core PCE inflation rate in the US surges to 2.8%, matching market estimates and remaining unchanged from the previous month. After coming in at 0.1% last month, the monthly core PCE now stands at 0.2%.
US Fed Takes Rate Cuts Off Table
On Wednesday, the Federal Reserve halted interest rate hikes, sending Bitcoin and the cryptocurrency market soaring. Despite Trump’s intentions to push for rate cuts, Fed Chair Jerome Powell has stated that the FOMC is not in a rush to drop rates again, prompting Trump to make scathing remarks.
Federal Reserve Governor Michelle Bowman has stated her desire to see significant improvement in inflation rates before the bank reduces interest rates any further. The markets are becoming more unsettled due to new inflation statistics, and the CME FedWatch tool indicates that there is an 84% chance that the Fed will keep interest rates steady at the next FOMC meeting in March.
Bitcoin Price Drops
Bitcoin’s price has fallen to $104,594, a decline of 0.5 per cent following the PCE inflation report. There was a low of $103,912 and a high of $106,418 in the past 24 hours. Traders’ interest has waned due to uncertainty, as shown by a 25% drop in trading volume over the past 24 hours.
After the PCE inflation report, the US dollar index (DXY) becomes very volatile, rising by 0.43% to 108.26. Furthermore, the yield on US 10-year Treasuries rose somewhat to 4.523 per cent. Traders have been wary of the market’s trajectory due to uncertainty, even though Bitcoin’s price swings counter to DXY and Treasury yield.
Summary
As a result of the steady increase in US PCE inflation, stock and Bitcoin Prices are expected to rise in the next months. Despite more optimistic economic predictions, the Federal Reserve is wary of lowering interest rates. Due to market anxiety and the subsequent small decline in Bitcoin’s value, trading volume has been lower since the inflation news.
Bitcoin’s price dipped slightly after the report, and the market is experiencing uncertainty, reflected in lower trading volumes and increased volatility in the US dollar and Treasury yields. The future trajectory of Bitcoin and other assets will depend on how inflation trends and the Fed’s monetary policy unfolds. Expect greater market volatility as investors closely monitor the Federal Reserve’s moves and upcoming inflation statistics, all while inflation keeps climbing.
