Sharp get dumped in Bitcoin ahead of critical US inflation data

Due to its better reflection of price changes in the economy and consumer behaviors according to CPI, the Fed places great importance on the US Personal Consumption Expenditures (PCE) data, which will be announced today at 3:30 PM TRT. For July, the PCE headline inflation is expected to show a 2.6% increase, similar to June.

In May and June, the core PCE, which saw an annual increase of 2.8%, is expected to have an increase rate of 2.9... If there is a 2.9% increase in core PCE, it will reach this level for the first time since February. Core inflation data, excluding food and energy prices, is also closely monitored by the Fed due to being less volatile and more realistic.

Still far from 2%

Recently, due to the impact of the "Trump tariffs", many inflation data had moved upwards. Fed Chairman Powell had also continued to apply the brakes on interest rate cuts, citing their inability to predict how far the effects of the tariffs could extend. Powell is facing severe criticism from Trump and his administration because of this expectation.

However, it is also a fact that the Fed's long-targeted inflation level of 2% is still a long way off... Nevertheless, markets continue to expect a 25 basis point cut from the Fed in September.

A drop in Bitcoin with hours to go...

Just hours before the release of the PCE data, a sharp pullback is observed in Bitcoin on Friday morning. The largest cryptocurrency, which traded above 113 thousand dollars last night, has fallen below 110 thousand dollars. It seems that the decline in Bitcoin is also negatively affecting the altcoins.

A potential high rate to be seen in the PCE could also undermine the Fed's expectations for a rate cut in the September meeting.

Powell mentioned the poor state of the job market despite the high rate of inflation at last week's Jackson Hole meeting and indicated a signal for an interest rate cut in September.

Published: August 29, 2025 11:41