PCE: Inflation Is Not Cooling DownJuly's PCE came in slightly worse than expected:
— Headline PCE: 3.7% YoY vs. 3.6% expected
— Core PCE: 3.3% YoY — in line with expectations
— Core PCE MoM: +0.2% — also in line with expectations
The key takeaway is that inflation remains well above the Fed's 2% target, while headline PCE has stayed at 3.7% for the second consecutive month.
For BTC, the signal is rather negative: the data gives the Fed no additional reason to move quickly toward monetary easing. At the same time, this wasn't a full-blown inflation surprise — the key Core PCE reading came in exactly as expected.
Now the market will have to assess how long the Fed is willing to tolerate inflation at these levels.
