Markets are already pricing in some of this. The dollar index is approaching 98, while Bitcoin and stocks have limited room to move. Major investors appear to be waiting for the data before taking new positions.

Wall Street Banks Expect Limited but Crucial Inflation Increase

JPMorgan forecasts a 0.37% monthly rise in both headline and core PCE. While this seems modest, it translates into a notable annual effect, lifting core PCE to 2.9%. November’s rate was 2.8%.

Bank of America, Morgan Stanley, and Barclays expect core inflation to rise 0.39–0.40% monthly, with an annual rate around 3%. Goldman Sachs, Citi, and UBS forecast smaller increases, but the overall picture is the same: the downward trend in inflation is slowing.

This is critical because core PCE is a primary reference for the Fed’s monetary policy.

Rate Cut Expectations Are Moving Further Out

If inflation rises as expected, the Fed may remain cautious about rate cuts. Recent strong employment data and resilient economic activity already reduce the likelihood of an early cut.

Futures indicate about a 48% chance of a June rate cut, while most Wall Street institutions see the first cut more likely in July. This adjustment is gradually recalibrating short-term liquidity expectations.

Bitcoin and Global Markets Trade in a Narrow Range

Crypto markets are similarly cautious. Bitcoin traded between $65,637 and $67,456 in the last 24 hours. Price hovering around $67,000 reflects investor caution ahead of macro data.

Trading volume is low, and options expiration is approaching, keeping volatility subdued. After the data, market direction is expected to clarify.

The stronger dollar and delayed rate cut expectations are key factors applying short-term pressure on risk assets, but the outlook is not one-sided.

The Big Question: Is Inflation Rising Again?

The PCE report will provide the first clear answer. If core inflation reaches 2.9%, the Fed may postpone cuts further, delaying liquidity expectations.

Market reaction often reflects uncertainty more than the direction itself. Once clarity arrives, even a neutral or slightly negative outcome could ease tensions.

Micro Data Block

• JPMorgan core PCE forecast: 0.37% (monthly)

• Wall Street forecast range: 0.37–0.40% (monthly)

• Expected annual core PCE: 2.9–3.0%

• Bitcoin 24-hour range: $65,637 – $67,456

• Dollar index: near 98

The US PCE inflation report will shape both the macro outlook and the Fed’s policy path. With major Wall Street banks revising forecasts upward, the slowdown in inflation is showing signs of stalling. Market volatility for Bitcoin, equities, and the dollar may rise immediately after the release. Rate cut timing remains the main driver of risk appetite.

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Some assets remain calm, others shift direction on a single headline. This week’s numbers could push the expected rate path further out than many anticipate.

Why Crypto Still Feels Cautious

Why can’t cryptocurrencies gain upside momentum? The answer isn’t found only in charts or whale activity. This week’s incoming data wave is reshaping macro expectations and once again putting the long-discussed rally narrative to the test. Even a small deviation in the PCE print could shelve the rate-cut timeline. That’s why understanding why markets may be forced to accept a “higher for longer” scenario is becoming increasingly critical.

Banks See Sticky Inflation

Major banks still don’t see a comforting picture in core PCE. Goldman Sachs points to core PCE tracking near 3% year over year — a level that keeps distance from the Fed’s 2% target.

Bank of America echoes that view, flagging near-term inflation stickiness. The shared takeaway is clear: without convincing cooling, policymakers are unlikely to move quickly. That keeps the risk of delayed rate cuts firmly on the table.

Why Rate-Cut Hopes Are Slipping

It’s not just inflation making markets uneasy — the legal front is tense as well. A true data deluge lies ahead. The PCE price index and Fed minutes will offer clues on disinflation momentum, while the Supreme Court of the United States is expected to deliver a key ruling tied to Trump-era tariffs.

That case adds another layer of uncertainty to trade policy. If the Court narrows presidential authority, pressure on import costs could ease over time — though any inflation impact would likely take longer to surface.

The Number Markets Are Stuck On

Persistently elevated core PCE reinforces the “higher for longer” narrative. Financial conditions have become increasingly sensitive to every incremental data point. On the trade side, the future of tariffs remains pivotal, especially for sectors already operating under cost pressure.

Some economists push back on claims that rolling back emergency tariffs would trigger economic disaster. Instead, many argue that businesses are already grappling with high input costs — and that uncertainty itself has become a separate burden.

With the macro calendar packed, crypto markets remain fragile. At the time of writing, Bitcoin was fluctuating around the $69,000 level, with volatility staying elevated. Risk sentiment from traditional markets continues to spill directly into digital assets.

If rate-cut expectations slide further, pressure on risk assets could intensify in the short term. That’s why investors are watching Fed minutes and PCE not just for bonds and equities — but for crypto direction as well.

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Economic Outlook and Inflation Expectations

The FOMC noted that economic activity continues to expand at a moderate pace. Although employment growth has slowed, the unemployment rate remained low through September. Inflation has risen this year and remains somewhat elevated. The Committee reaffirmed its commitment to maximum employment and a long-term 2% inflation target.

Fed policymakers project core PCE inflation at 2.5% and overall PCE at 2.4% by the end of 2026, down from previous forecasts of 2.6% in both categories. Unemployment is projected at 4.5% for 2025 and 4.4% for 2026. According to the median projection, interest rates are expected to reach 3.1% by the end of 2028.

Securities and Reserves

The FOMC decided to end the reduction of total securities holdings as of December 1. Reserve balances are assessed to be ample, and the Fed indicated it may begin purchasing shorter-term Treasury securities if needed to maintain sufficient reserves. The Committee will continue monitoring incoming data to evaluate the appropriate stance of monetary policy.

Voting Results

The policy decision passed with a 9-3 vote. Schmid and Goolsbee voted to keep rates unchanged, while Miran favored a half-point rate cut. Additionally, four Fed officials forecast an additional two-quarter-point rate cut for 2026.

Bitcoin and U.S. Stock Market Reaction

Following the decision, Bitcoin briefly fell below $92,000 but quickly recovered above $93,000. U.S. stock indices moved higher, with the Dow Jones up 0.62%, S&P 500 up 0.26%, and Nasdaq up 0.03%. Investors are closely watching the Fed’s rate cut and Treasury purchases.

• The Fed will purchase $40 billion in Treasury securities over the next 30 days

• Treasury purchases will begin on December 12

• Policy decision passed with a 9-3 vote

• Schmid and Goolsbee voted to keep rates unchanged

• Miran supported a half-point rate cut

• Four Fed officials forecast two quarter-point rate cuts in 2026

• Reduction of securities holdings ended on December 1

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Bitcoin’s rebound from a recent low of $80,000 to above $85,000 over the weekend reflects renewed investor confidence. Trading volumes jumped nearly 50%, signaling increased market activity. Analysts attribute part of this surge to returning institutional participation. US spot ETFs saw inflows of about $238 million, helping to restore market confidence. Weekend trading typically drops by up to 25%, which can exaggerate price movements.

Investor sentiment also benefited from expectations of a Federal Reserve rate cut. Markets are currently pricing in a 67% probability of a December reduction, boosting optimism. Additionally, BlackRock’s proposed staked Ethereum ETF, with an estimated 3–4% yield, further fueled market confidence.

US Economic Reports Could Drive Volatility

Investors are closely watching three key US reports this week: the Producer Price Index (PPI), weekly jobless claims, and the Fed’s preferred inflation gauge, the PCE.

The PPI, scheduled for release on Tuesday, November 25, will reveal wholesale price trends. A higher-than-expected PPI could reduce rate-cut expectations, while softer data might support policy easing early next year.

Weekly jobless claims, due on Wednesday, November 26, could also influence market sentiment. Higher-than-expected unemployment claims typically reinforce the case for sooner rate cuts. Last week’s US job report exceeded projections, driving Bitcoin gains.

The PCE inflation report will likely be the key short-term market driver. By reflecting real consumer behavior, any upside surprise could trigger immediate volatility across Bitcoin and major altcoins.

Analysts Split on Market Sustainability

Analyst Oleg Kalmanovich notes that US retail sales and PCE data will determine if the recovery continues. Weak data could strengthen the case for a December rate cut, while stronger numbers may apply pressure on the market into early 2026.

CryptoQuant highlights that short-term holders have largely capitulated, suggesting a potential near-term bounce. However, losing the $80,000 support level could trigger a prolonged correction.

According to QCP Asia, BTC is showing early recovery signs after a brutal 30% drop. Dovish Fed comments have pushed December rate-cut expectations to 75%. Derivatives positioning indicates traders are still betting on upside, with year-end call open interest outweighing puts. Negative funding rates also suggest long leverage has been flushed, reducing downside risk.

This week is pivotal for the crypto market. PPI, jobless claims, and PCE data, combined with positive ETF flows, could determine whether Bitcoin’s rebound above $87K is sustainable.

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What Powell Said About Labor Market and Risk Balance

Powell noted that labor supply has weakened in line with demand, while employment growth has sharply slowed near balance levels. He added that shifts in the risk balance may require policy adjustments. According to Powell, downside risks in the labor market are rising, and the overall economic balance is being closely monitored.

Inflation and Tariffs

Recent data shows that 12-month PCE inflation increased by 2.6% in July, with core inflation rising 2.9%. Powell emphasized the slowdown in consumer spending and the impact of tariffs on prices. A reasonable scenario assumes that tariff-related inflation effects will be temporary. However, while persistent inflation pressure is possible, labor market risks likely limit it.

Powell stressed that a one-time rise in price levels cannot be allowed to become a sustained inflation problem.

Is Powell Preparing for a Rate Cut

Following Powell’s remarks, the market is now pricing a 91.3% probability of a Fed rate cut in September, up from 75% prior to the speech. Investors continue to fully price in the possibility of two rate cuts by the end of the year.

Impact on Crypto Markets: Bitcoin and Ethereum Rising!

Before Powell’s speech, Bitcoin traded around $112,500, but during the speech it surged to $115,600. Ethereum also climbed to $4,600. This movement highlights how the Fed’s policy stance and dovish signals can influence crypto assets.

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Prediction markets like Kalshi indicate declining bets on a 25-basis-point rate cut while wagers on unchanged rates are increasing. Currently, 68% of investors expect a 25-basis-point cut in September, though this share is decreasing. Conversely, 34% predict no change in Fed rates. This trend adds uncertainty to the markets. 

CME FedWatch shows a 79% chance for a 25-basis-point cut in September. Down from 99%, investors now expect two rate cuts this year instead of three. This shift encourages more cautious market behavior and delays investment decisions. 

Investors Await PCE Data While Bitcoin Holds Support 

Crypto investors closely monitor the Fed’s preferred inflation gauge, PCE data. In June, U.S. PCE inflation rose 2.6% year-over-year, exceeding May’s upwardly revised 2.4% estimate. These figures will be crucial for the Fed’s September decisions, with results scheduled for August 29. 

Bitcoin finds support near $112,000, and analysts suggest buying on dips. Michael van de Poppe notes that BTC follows classical price movements. He recommends accumulating if prices fall below $110,000. Rekt Capital recalls Bitcoin fell 29% in 2017 and 25% in 2021. Over the last 24 hours, BTC dropped 0.31% to $112,892. Trading volume fell 10%, signaling reduced investor interest. 

This uncertainty and volatility affect global markets and encourage cautious investor behavior. All eyes remain on the August 29 PCE release. Fed Chair Powell’s Jackson Hole speech and rising U.S. 10-year Treasury yields, alongside the DXY dollar index hitting 98.34, continue to influence market dynamics. 

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The post Crypto and Markets Eye PCE Data: What Are Rate Expectations? appeared first on Coin Engineer.

The US Bureau of Economic Analysis (BEA) will release the PCE inflation report on March 28, measuring the inflation rate in the prices US consumers pay for goods and services.

Singapore-based digital asset firm QCP Group stated that the PCE data could be a key catalyst for Bitcoin and other risk assets.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

In a Telegram post, QCP Group said:

“As we approach Friday’s quarterly expiry, with the highest open interest in topside strikes above $100K, we don’t expect major volatility driven by options positioning alone. But attention will turn to the PCE inflation print, which could become the next key catalyst.”

April Has Historically Been a Strong Month for Bitcoin!

Bitcoin has averaged a 12.9% return in April, making it one of the strongest-performing months historically. CoinGlass data shows that April is among Bitcoin’s best months in terms of price gains.

Can Bitcoin Reach $110,000 Amid Easing Inflation Concerns?

BitMEX co-founder Arthur Hayes predicts that Bitcoin could first reach $110,000 before pulling back to $76,500.

Juan Pellicer, senior analyst at IntoTheBlock, noted that Bitcoin is showing strong signs of recovery, driven by institutional demand and significant investments.

“BTC is showing signs of recovery, driven by growing institutional interest and significant investments from large players. Additionally, the Federal Reserve’s recent monetary easing could further boost liquidity, favoring a price increase in the near term.”

Pellicer emphasized that while market volatility remains a risk, the overall momentum suggests that Bitcoin is more likely to hit the $110,000 target before any potential pullback.

Bitcoin is entering April, a historically strong month for its price performance. If US inflation data meets expectations and the Fed maintains its loose monetary policy, Bitcoin could soar to $110,000. However, global economic uncertainties could also lead to a potential correction down to $76,500.

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The post Can Bitcoin Reach $110,000? US Inflation Data is Key! appeared first on Coin Engineer.