Bitcoin faced a decline to $104,600 in the wake of recent Federal Reserve statements and inflation data meeting expectations.
Fed Announcements and Interest Rates
The December 2024 Personal Consumption Expenditures (PCE) data indicated an increase compared to the previous month. This is a key inflation indicator for the Federal Reserve, showing deviation from the 2% target. The previous figure of 2.4% was already close to the Fed's goal set for the next two years. Historically, sharp declines have fueled crypto rallies, but the recent stabilization suggests a different market reaction this time.
Trump's Policy and Past Actions
Former President Donald Trump continues his efforts to reduce energy prices, which could help moderate PCE inflation, given that energy costs contribute significantly to the index. Additionally, the holiday season likely inflated December figures, making the latest data less alarming. Trump is closely monitoring these numbers and preparing policy adjustments, as he remains adamant about lowering interest rates.
Cautious Stance by Michelle Bowman
Fed member Michelle Bowman delivered a cautious outlook, causing BTC to slide further during her remarks:
Following the inflation data, short-term US interest rate futures declined, while investors anticipate the next Fed rate cut in June.
