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Bitcoin Price Sees Recovery After US PCE Inflation Data
Investors eagerly awaited US PCE inflation data after the US GDP data showed that the economy advanced better than market expectations in the first quarter. Notably, Personal Consumption Expenditures (PCE) and Core PCE Inflation data are key indicators for tracking the current level of inflation. Furthermore, these are also fundamental tools that the US Federal Reserve considers when planning its interest rate plans.
US PCE inflation soars 2.7%
Recent data from the Commerce Department showed that the PCE inflation in the US increased 0.3% in April, in line with market expectations. Notably, March PCE data also rose at a 0.3% pace. In the annual comparison, PCE inflation jumped 2.7%, which is also in line with Wall Street expectations.
Simultaneously, the PCE Core inflation, excluding food and energy prices, jumped 0.2% last month, after spiking 0.3% the previous month. Meanwhile, on an annual basis, core PCE inflation jumped 2.8%, a similar increase to March.
Although Core PCE cooled last month, the level of inflation still remains higher than expected, dampening investor sentiment. Furthermore, the inflation remaining above the central bank’s expectation of a 2% target has dampened investor sentiment so far.
That said, traders are looking for clarity on potential rate cuts from the US Federal Reserve as higher policy rates have dampened market participants’ risk-betting appetite.
Bitcoin price registers slight recovery
The price of Bitcoin registered a slight recovery, despite the latest inflation data. Meanwhile, following the release of PCE inflation, Bitcoin Price rose 0.95% to $68,773.23, while its trading volume remained low at $27 billion in the last 24 hours.
Meanwhile, the US 10-year bond yield fell 0.73% to 4.515, while US dollar index futures fell 0.27% to $104.380. Notably, the latest PCE data has further fueled concerns about a dovish stance by the US Federal Reserve.
According to the CME FedWatch tool, there is a 99% probability that the Federal Reserve will not make any changes to its policy rates at its next meeting in June.
Meanwhile, Matrixport co-founder Daniel Yan recently highlighted the importance of April’s Personal Consumption Expenditure (PCE) data. In a social media post, Yan stated that a 0.2% monthly increase for Core PCE and PCE would be optimistic for the market, while a 0.3% increase would be pessimistic. If one measure is at 0.2% and the other at 0.3%, Yan indicated a neutral outlook.