Will tonight's data determine whether Bitcoin breaks below 100,000?
Tonight, the U.S. will announce the PCE index, which may signal the gradual closing of the Federal Reserve's rate cut window.
Tonight, the U.S. will announce the inflation measure most closely monitored by the Federal Reserve—the Personal Consumption Expenditures Price Index (PCE). The market has relatively clear expectations for this, with the April PCE price index expected to increase by only 0.1% month-on-month, and the year-on-year growth rate to drop from 2.3% to 2.2%, nearly returning to pre-COVID levels. In terms of core data, the core PCE growth rate, excluding the volatility of food and energy prices, is also expected to be 0.1% month-on-month, although the year-on-year growth rate will remain high at 2.6%.
The PCE is highly regarded because the Federal Reserve prefers to use it to measure the underlying trend of inflation. It is worth noting that the inflation effects brought about by the tariff increases during the Trump administration are only just beginning to manifest in the U.S. economy. Most economists predict that even if the Trump administration eases some tariffs, the inflation level may rebound to 3% in a few months.
Currently, the U.S. core PCE has hovered in the range of 2.8% to 2.6% for six consecutive months, which is gradually closing the Federal Reserve's rate cut window. Although some Federal Reserve officials still hold a positive attitude toward rate cuts, data from the interest rate futures market conveys a different signal. Traders' predictions for the probability of a rate cut in September have sharply declined from 68% a week ago to 47%. These changes in data suggest that the market believes the U.S. economy is at a crossroads in a new inflation cycle, with the future direction of inflation and adjustments in the Federal Reserve's monetary policy full of uncertainties!
The key to the Federal Reserve's rate cuts is the inflation data! If the data is negative, it will inevitably cause panic! Along with that, large amounts of capital will flow out! $BTC may break below the 100,000 mark!
Is everyone ready? The big one is coming!
Watch for: LPT TRB DEXE
