Hot PCE Leaves Bitcoin in Limbo

April's headline PCE inflation surged to 3.8% year-over-year, the highest in two years and nearly double the Fed's 2% target. Core PCE held at 3.3%, its strongest since October 2023. While monthly figures showed some easing—core came in at 0.2% versus the expected 0.3%—the overall data presents a dilemma for the Fed, which cannot yet pivot to a dovish stance. This leaves Bitcoin in a precarious position, as the prospect of sustained high interest rates dampens risk appetite. The market now faces a prolonged period of monetary tightening, limiting the upside for cryptocurrencies until inflation convincingly trends lower. Bitcoin's near-term trajectory hinges on whether the Fed can achieve a soft landing without tipping the economy into recession.

Read full article on CryptoSlate