Bitcoin continues to trade below $107,000 as economic signs suggest possible changes in monetary policy.
US Inflation Situation
The Personal Consumption Expenditures (PCE) data released today showed a weaker-than-expected rise in consumer spending. Core PCE, the Fed’s preferred inflation gauge, rose by 0.2% month-over-month and 2.7% annually, aligning with forecasts but signaling a cooling trend in price pressures. Notably, personal income growth missed expectations, while consumer spending unexpectedly declined.
Signals from the Federal Reserve
In the past 24 hours, three Federal Reserve officials suggested that a **rate cut in July is possible**—provided inflation doesn’t unexpectedly spike. Among them, Fed Governor Christopher Waller emphasized that slowing job creation could justify a policy shift even sooner. This is important: unlike previous meetings where the Fed’s decisions were nearly unanimous, future rate cuts may be decided by majority vote. That signals internal divergence within the FOMC and raises the probability of earlier easing.
Geopolitics and Future Trade Agreements
Former President Donald Trump and U.S. Commerce Secretary have confirmed that **multiple international tariff agreements are in final negotiation stages**. These deals are expected to be revealed before July 9, which is now only 33 days away from the next Fed meeting. If the agreements effectively reduce trade tensions without adding to inflation pressures, the Fed could act swiftly. Meanwhile, the European Union is reviewing the U.S. offer and preparing countermeasures, just in case talks fail.
Next week will be pivotal. If countries begin announcing finalized tariff agreements and economic data continues to ease concerns, **the Fed could kickstart a series of rate cuts**. These events are expected to have significant implications across asset classes, including Bitcoin.
