PCE Revision May Show Fed Hiked Too Early, Boosting Bitcoin (BTC) Prospects

Tom Lee believes that an upcoming revision to the personal consumption expenditures (PCE) inflation index could show that the Federal Reserve hiked interest rates too early. The revised PCE methodology, set to be released on September 30, may lower core inflation readings by 0.2 to 0.4 points.

This change alone could pull the annual reading of core PCE from 3.4% down to around 3%, according to Lee. He claims that other pressures in the data should also ease in the months ahead, including tariffs, flash memory prices, and fees investors pay to manage their money.

Lee's argument is that if inflation starts to decline, it's not because of the Fed hikes that happened last week, but rather due to policies already in place. This, he says, means 'the Fed could actually walk back some of that hawkishness,' which would be bullish for Bitcoin (BTC).

However, CNBC's Scott Wapner questioned whether a methodology change would alter the underlying inflation. Lee countered by saying that the components driving the gap do not affect most households.