Inflation Fears Drive Rate Hike Expectations, Bitcoin Sees 3% Drop

This week's macroeconomic summary revealed a shift in the global narrative towards 'inflation re-emerging - major central banks turning hawkish again - growth resilience coexisting with policy tightening risks.'

The United States saw its July PCE data show both overall and core PCE rising by 0.2% month-on-month, year-over-year rates of approximately 3.7% and 3.3%, indicating inflation remains above the Federal Reserve's 2% target.

Federal Reserve Chairman Kevin Warsh stated in his speech at Jackson Hole that 'inflation is still too high,' and recent data is insufficient to prove the underlying trend has improved materially.

The European Union faces similar pressures, with August Eurozone inflation rising year-over-year to about 3.3%, mainly driven by energy prices, increasing pressure on the ECB to tighten policy further.