PCE data is out. To be honest, the result itself isn’t really surprising, but the three layers of signals pointing in the same direction is pretty stifling.
In May, overall PCE rose 4.1% year-on-year, and core PCE rose 3.4% year-on-year, in line with expectations, but it also confirms a new high since 2023. Inflation hasn’t spiraled out of control, but there are also no signs it’s going to move downward.
What’s more troublesome is that the driving force has shifted from energy to housing and durable goods. This kind of structural spread is harder to deal with than a simple energy-price rise because it’s stickier and more difficult to suppress.
Williams from the Fed said inflation returning to the 2% target may be delayed until 2028. There’s a lot of information in that sentence. It’s not just about whether rate cuts happen this year; it’s that the entire tightening cycle may be much longer than originally thought. Williams is already hawkish, and this data will only make him even more forceful.
Market positioning also reacted very directly. On Wall Street, net long exposure in the U.S. dollar rose to $29.4 billion. That’s a heavy stake, indicating institutions are using real money to bet on deeper tightening—not just talking about it.
In crypto, now $BTC $59905 24h -1.5%, $ETH $1552 24h -4.1%. ETH is falling worse than BTC, which suggests that when risk appetite contracts, capital first concentrates in places with better liquidity—this is a very classic defensive pattern.
I think the hardest part right now is that everything lines up. Inflation data confirms the peak, Fed officials’ judgment points to a delayed achievement of targets, and market positioning is all-in on being long the dollar. Three signals point to the same conclusion. This isn’t a kind of pressure that will disappear quickly—it’s structural.
That reversal sentiment window from Micron’s earnings report opened, but today’s PCE has pushed it down by another notch. The crypto market’s situation right now is a bit like being sandwiched: the AI demand narrative is a tailwind, but macro liquidity is a headwind. The two forces are tugging against each other, and the short-term direction is unclear.
If BTC at $60K really can’t hold, this weekend might not be so great 🥲
DYOR (not investment advice)
In May, overall PCE rose 4.1% year-on-year, and core PCE rose 3.4% year-on-year, in line with expectations, but it also confirms a new high since 2023. Inflation hasn’t spiraled out of control, but there are also no signs it’s going to move downward.
What’s more troublesome is that the driving force has shifted from energy to housing and durable goods. This kind of structural spread is harder to deal with than a simple energy-price rise because it’s stickier and more difficult to suppress.
Williams from the Fed said inflation returning to the 2% target may be delayed until 2028. There’s a lot of information in that sentence. It’s not just about whether rate cuts happen this year; it’s that the entire tightening cycle may be much longer than originally thought. Williams is already hawkish, and this data will only make him even more forceful.
Market positioning also reacted very directly. On Wall Street, net long exposure in the U.S. dollar rose to $29.4 billion. That’s a heavy stake, indicating institutions are using real money to bet on deeper tightening—not just talking about it.
In crypto, now $BTC $59905 24h -1.5%, $ETH $1552 24h -4.1%. ETH is falling worse than BTC, which suggests that when risk appetite contracts, capital first concentrates in places with better liquidity—this is a very classic defensive pattern.
I think the hardest part right now is that everything lines up. Inflation data confirms the peak, Fed officials’ judgment points to a delayed achievement of targets, and market positioning is all-in on being long the dollar. Three signals point to the same conclusion. This isn’t a kind of pressure that will disappear quickly—it’s structural.
That reversal sentiment window from Micron’s earnings report opened, but today’s PCE has pushed it down by another notch. The crypto market’s situation right now is a bit like being sandwiched: the AI demand narrative is a tailwind, but macro liquidity is a headwind. The two forces are tugging against each other, and the short-term direction is unclear.
If BTC at $60K really can’t hold, this weekend might not be so great 🥲
DYOR (not investment advice)