The US PCE inflation data, the Federal Reserve’s preferred inflation gauge, is set for release today. Wall Street estimates the September PCE and Core PCE prints similar to the prior month, with a slight rise in headline PCE to 2.8%.
This marks the last piece of data the FED sees before making its rate decision and economic projections. Any shift in estimates could significantly alter Fed rate cut odds. Bitcoin and the crypto market brace for volatility as today’s inflation report coincides with crypto options expiry.
Wall Street Estimates on US PCE Inflation
The U.S. Bureau of Economic Analysis will release the September US PCE inflation on December 5, which was delayed due to the prolonged government shutdown. The market will directly see the December PCE report next at the end of January next year.
Economists forecast point to a modest uptick, with headline PCE inflation expected to rise 0.3% month-over-month (MoM). The year-over-year (YoY) print is projected at 2.8%. Meanwhile, core PCE is projected at 0.2% MoM and 2.9% YoY. This aligns with August’s sticky PCE inflation reading but is still above the Fed’s 2% target.
The Wall Street Journal’s Nick Timiraos said, “With the CPI and PPI now in hand for September, core PCE inflation is tracking at around +0.22%, very close to where core CPI printed for that month.” Any drop in monthly print will bring down inflation to 2.8%.
Wall Street giants, including Barclays, Citi, Goldman Sachs, Nomura, UBS, and others, see PCE remaining sticky and headline at 2.8% and core PCE at 2.9%.
Wall Street PCE Inflation Estimates. Source: Nick TimiraosFed Rate Cut Stance Ahead of US PCE Inflation
According to Truflation, PCE is now stabilized at 2.15%, one of the lowest levels this year. Meanwhile, Truflation core PCE is at 2.62% today. The Bank of Japan’s rate hike stance pushed up Japanese bond yields and increased volatility in risk assets, including Bitcoin.
Recently, Treasury Secretary Scott Bessent claimed that there is no recession risk in the US economy or a rise in inflation. However, Fed officials’ stance on the December Fed rate cut remains mixed.
Currently, the CME FedWatch tool shows 87% odds of a 25 bps rate cut by the central bank in December, bringing the target range to 3.50%-3.75%.
Crypto market awaits the FOMC meeting and Jerome Powell’s press conference on December 10. As CoinGape reported earlier, officials will decide on the Fed rate cut, economic projection for the coming months, and the potential start of quantitative easing (QE).
Experts on How Bitcoin and Crypto Market Could React
Bitcoin price holds above $92K amid positive sentiment on potential Fed rate cut. Notably, no comments on monetary policy by Fed Chair Jerome Powell and hopes about Kevin Hassett to succeed Fed Chair Powell have further boosted Fed rate cuts odds.
Analyst Michael van de Poppe claimed Bitcoin keeps moving on the same price levels, with direction still unclear. If bulls lose this level, BTC might retest the $85K level for a final sweep and double bottom pattern.
Bitcoin in 4-Hour Timeframe. Source: Michael van de Poppe“I still think that we’re done with this entire correction and are forming a bottom, before we go back into a leg upwards to the ATH,” he added.
If $91.5K holds as support, then Bitcoin would see a rebound towards $100K in the coming week. Meanwhile, analyst Ali Martinez highlighted that 300,648 BTC was accumulated at around $84,400, making it a key level.
Trading volume has dropped by 20% over the last 24 hours amid crypto market options expiry. Sentiment in the derivatives market remained negative, as per CoinGlass data. The total BTC futures open interest fell 1% to $59.29 billion at the time of writing. BTC futures open interest on CME tumbled 1.58% and almost 0.80% on Binance.
Source: https://coingape.com/us-pce-inflation-wall-street-estimates-expert-insights-what-crypto-market-can-expect/
