Wall Street Estimates on US Fed’s Preferred Inflation Gauge PCE, Bitcoin At Risk?

Crypto traders watch out for personal consumption expenditures (PCE) inflation data for further cues as Bitcoin (BTC) price swoosh past $63,900. The U.S. Bureau of Economic Analysis will release the U.S. Federal Reserve’s (Fed) preferred inflation gauge PCE. The data is crucial because of the recent hotter-than-expected CPI, pulling Fed rate cuts off the table. Personal income, personal spending, and initial jobless claims are also due today.

Wall Street giants including JPMorgan, Bank of America, UBS, Morgan Stanley, Citigroup, Deutsche Bank, Nomura, RBC, Barclays, Goldman Sachs, TD Securities, and Wells Fargo remain split on PCE after the CPI scare, but most anticipate inflation to cool further.

As per the consensus, The annual PCE inflation is expected to further cool to 2.4% from last month’s 2.6%, with the monthly rate seen rising 0.3%. Also, the Core PCE, the Fed’s preferred gauge to measure inflation, is expected to rise 0.4% month-on-month while the annual rate is predicted to cool to 2.8%, from last month’s 2.9%.

Also Read: Bitcoin (BTC) Price Faces Rejection At $64,000 As US Govt. Moves $1 Billion in BTC

Fed Rate Cuts in September

Amid Wall Street estimates mostly in line with market consensus, Fed Chair Jerome Powell’s expecting three rate cuts in 2024 and Fed officials remaining cautious after CPI, expects predicted rate cuts are likely to happen starting September. The market currently has a 65% chance of Fed rate cuts in June, with March and May off the table. Moreover, the CME FedWatch shows a 51% probability of a 25 bps rate cut in June.

The US dollar index (DXY) moves around 103.8 on Thursday after facing heightened volatility in the previous session. A stronger-than-expected PCE could reduce bets for a rate cut in the first half even further, potentially lifting the dollar and impacting Bitcoin price.

Moreover, US 10-Year Treasury yields (US10Y) are rising ahead of key PCE data, with a current 0.014% gain to 4.29%, as per CNBC. Bitcoin price moves in the opposite direction to US treasury yield.

Also Read: MicroStrategy’s Bitcoin Bet Unlocks Massive Shareholder Value, MSTR at $1000

Bitcoin Price to Face Resistance Amid PCE Release?

Popular analyst Michael van de Poppe recommends going for longs between $46K-$53K if a correction happens. Matrixport warns investors of a potential 15% market correction following Bitcoin’s recent surge past $60,000, despite no major resistance before ATH level of $68.7K.

Spot Bitcoin ETF and FOMO are driving the rally, with Bitcoin ETFs recording the largest inflow of $673 million on Wednesday.

BTC price skyrocketed over $63,000, less than 9% away from the $68.7K. The 24-hour low and high are $57,093 and $63,913, respectively. Furthermore, the trading volume has increased by 150% in the last 24 hours, indicating a rise in interest among traders.

Futures and options open interests (OI) rose to record levels, with total options OI rising over 8% to $33.79 billion, as per Coinglass data. FOMO continues to push Bitcoin price to $100K prediction by multiple experts despite sky-high funding rates.

Also Read: Ripple Alum Spearheads Support Drive For XRP Attorney John Deaton’s Senate Run

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Varinder has 10 years of experience in the Fintech sector, with over 5 years dedicated to blockchain, crypto, and Web3 developments. Being a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.