The inflation pivot
Real talk: the macro vibes have been pretty intense lately, but today’s PCE inflation data—the Fed’s favorite gauge—came in a little softer than expected. While core PCE prices rose 0.2% in August, that beat the 0.3% forecast, and the year-over-year figure hit 3%, lower than the 3.3% estimates.
What does this mean for your bags? Traders are highkey pulling back on their bets for an October rate hike. According to CME FedWatch, the odds of a hike at the Fed’s October 28 meeting dropped to 47.1%, down from 70% just two days ago. Following the news, Bitcoin climbed about 1% to reach roughly $84,750.
Market pulse
It’s not just crypto; the broader market is feeling the shift. U.S. Treasury yields are dipping, with the 10-year yield down over 4 basis points, and stock index futures are seeing a modest 0.4% bump.
However, stay grounded—nothing here is financial advice. Analysts at Bitfinex have flagged that high inflation-adjusted yields on Treasuries remain a major headwind for BTC because they increase the opportunity cost of holding non-yielding assets. Plus, some are side-eyeing the numbers, noting that the Bureau of Labor Statistics changed its methodology for measuring certain components in this report.
What’s next?
While we’re enjoying the green candles for a second, the plot thickens on Friday. All eyes are now on the official government jobs report. A weaker-than-expected print there would likely make the Fed even more cautious, which could be bullish for the markets. Meanwhile, firms are still building; Multicoin Capital just announced an investment in Grass, looking to tap into the infrastructure needed for autonomous AI agents.
Why it matters
When the Fed signals it might hold off on aggressive rate hikes, it generally removes a major ceiling for risk assets like Bitcoin. Just remember that the market is still volatile and macro data is the main character right now—so don't ape in without checking the full picture.
