🇺🇸The U.S. Federal Reserve’s closely watched inflation gauge showed some cooling in August.
Core PCE inflation, which excludes food and energy prices, increased 3.0% year over year in August, compared with 3.3% expected. On a monthly basis, core PCE rose 0.2%, below the 0.3% forecast.
📊 Key numbers:
• Core PCE YoY: 3.0%
• Forecast: 3.3%
• Core PCE MoM: +0.2%
• Headline PCE YoY: 3.4%
• Headline PCE MoM: +0.3%
• Fed inflation target: 2%
💰 Why it matters for crypto:
Softer-than-expected inflation can reduce expectations for additional rate increases, potentially easing pressure from the U.S. dollar and Treasury yields. Markets subsequently reduced some expectations for an October rate hike.
🔎 Traders are watching:
• Fed rate expectations
• U.S. Dollar strength
• Treasury yields
• Bitcoin and altcoin reaction
• Upcoming employment and inflation data
⚠️ Cooling inflation does not mean inflation has returned to the Fed's 2% target. Core PCE remained at 3.0% annually, so monetary-policy expectations can still change with incoming data.