Soft PCE Data Eases Rate Hike Concerns, Supports Bitcoin
A softer-than-expected reading of the Personal Consumption Expenditures (PCE) data has eased market concerns about another interest rate increase in October, supporting risk assets. The latest PCE figures showed headline inflation rising 0.3% from July and 3.4% year-over-year, while core PCE increased 0.2% every month and 3% annually.
This shift in sentiment has provided a constructive backdrop for Bitcoin, with the cryptocurrency trading steadily near $84,300 despite low volatility and neutral investor positioning ahead of the inflation release.
Rising Treasury yields continue to pressure risk assets, but analysts note that lower future yields on tokenized Treasury products could eventually redirect capital toward crypto. Brendan Ma, head of investment strategy at the Arbitrum Foundation, said the 0.2% monthly increase in core PCE prices is encouraging for the Federal Reserve.
The inflation report also influenced market expectations, with Martin Lee, market insights lead at DWF Labs, stating that the softer reading may reduce the likelihood of another Fed increase and encourage investors to position more positively.