US Inflation Data in Line with Expectations – What It Means for Federal Reserve Rate Cuts

The latest data on the US personal consumption expenditures (PCE) price index has been released, meeting expectations and drawing attention due to its potential impact on Bitcoin and the broader cryptocurrency market.

The US Bureau of Economic Analysis revealed the October PCE data, which indicated that inflation rose by 2.3% year-on-year (YoY), in line with forecasts. Additionally, inflation rose by 0.2% compared to the previous month, consistent with the September figures.

The Core PCE, which excludes volatile food and energy prices, showed a 2.8% increase YoY, matching estimates and slightly up from the 2.7% recorded in September. On a monthly basis, Core PCE rose by 0.3%, again aligning with expectations and similar to the previous month’s performance.

As noted by Coingape, this inflation data is a critical macroeconomic indicator this week, particularly due to its influence on the cryptocurrency market. The US Federal Reserve’s minutes from their latest meeting were also released, signaling that any further rate cuts will depend on whether inflation moves closer to their target of 2%.

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Given that the PCE is the Federal Reserve’s preferred inflation gauge, these figures will play a key role in shaping their decisions on future rate cuts. With the next Federal Open Market Committee (FOMC) meeting scheduled for December 17-18, the market is anticipating a 66.5% probability of a 25 basis point rate reduction, according to CME FedWatch data.

Alexander Stefanov