๐ What happened?
PCE inflation (July) = 2.6% โ matches expectations
Core PCE inflation (removes food & energy) = 2.9% โ also matches expectations, and itโs the highest since Feb 2025
๐ค Why does this matter?
The Fed (US central bank) watches PCE inflation the most when deciding interest rates.
Inflation is still above the Fedโs target of 2%. That usually means they should keep rates higher to cool prices.
๐ But hereโs the twist:
Even though inflation is a bit sticky, the Fed is still signaling rate cuts later this year (September & December).
This is because the economy is slowing (lower growth, cracks in jobs market), and the Fed wants to avoid a hard landing.
๐ข What it means in simple terms:
Prices are still rising a little too fast.
But the Fed is prioritizing economic growth over fighting inflation right now.
Rate cuts = cheaper borrowing โ more spending & investing โ stocks & crypto usually go up.
๐MY POV:
Inflation is still โsticky,โ but the Fed is willing to cut rates anyway โ this is bullish for markets (stocks + crypto) in the near term.
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