Bitcoin nears $27K despite ‘hot’ PCE data sparking June rate hike bets
Bitcoin (BTC) made snap gains at the May 26 Wall Street open as United States macroeconomic data delivered a nasty surprise.
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD nearing $27,000 on Bitstamp.
The pair rose unexpectedly after the day’s Personal Consumption Expenditures (PCE) data showed its first rises since October 2022.
Such a reading should present a headwind for risk assets, including crypto, as it implies that inflation remains persistent and that more financial tightening may be required to tame it.
“This is a major setback to the Fed’s fight against inflation,” financial commentary resource The Kobeissi Letter wrote in part of a response.
Kobeissi noted that expectations for interest rate hikes from the Federal Reserve were “shifting rapidly” thanks to the PCE event.
According to CME Group’s FedWatch Tool, the market now narrowly favors a fresh hike in June, whereas before, it was more than 80% certain that a pause would occur.
Financial commentor Tedtalksmacro, meanwhile, acknowledged that the PCE gains were relative.
“US PCE data came in hot, above analyst expectations. On a 3-month annualised basis, however, core PCE printed sharply lower... down to 4.2%,” he reacted.
Cause for relief for traders, meanwhile, came from accompanying news that the Biden administration was nearing a deal on the debt ceiling, with the deadline now just days away.
The S&P 500 and Nasdaq Composite Index were up 1% and 1.65%, respectively, at the time of writing.
Turning to Bitcoin itself, Michaël van de Poppe, founder and CEO of trading firm Eight, flagged the potential for upside continuation.
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