The remarks made by Fed Chairman Powell on Wednesday evening unfortunately did not please investors. Powell, who stated that future actions will be based on upcoming data, admitted that they have entered a tightening period, which is different from previous meetings, and acknowledged that the current policy is tight. Now, the eagerly awaited PCE data has been announced.
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Cryptocurrency investors are also closely interested in the US Core Personal Consumption Expenditures (PCE) data. We previously expressed that the expectation was 4.2%. Compared to the previously announced 4.6%, Core PCE decreased by 0.5% and was announced as 4.1%. This indicates that the decrease in inflation can continue at least in the short term.
Core PCE is closely monitored by investors to track the current state of inflation. Since the index that follows personal consumer expenditure items excluding food and energy expenses has been steadily decreasing, we may see slight increases in cryptocurrencies.
What will determine the market direction are the employment, inflation, and PMI data to be announced until the middle of next month. Although the Fed is confident that a recession will not occur, Bloomberg analysts are optimistic about the rest of the year. On the other hand, there are concerns about inflation becoming more sticky as the base effect weakens.
