The price of Bitcoin displayed a moderate rebound despite recent U.S. Personal Consumption Expenditure (PCE) data revealing inflation persisting above the Federal Reserve's 2% target range. Investors eagerly anticipated this data following promising U.S. GDP results for the first quarter. The PCE and Core PCE inflation figures serve as critical indicators of current inflation levels and significantly influence the Federal Reserve's interest rate decisions.

U.S. PCE Inflation Trends Amid Economic Data Analysis

Recent reports from the Commerce Department unveiled a 0.3% increase in U.S. Personal Consumption Expenditure (PCE) inflation in April, aligning with market expectations. March also witnessed a similar 0.3% uptick. On a year-over-year basis, PCE inflation surged by 2.7%, meeting predictions set by Wall Street analysts.

Similarly, Core PCE inflation, excluding volatile food and energy prices, grew by 0.2% in the last month, following a 0.3% rise in March. Annually, Core PCE inflation escalated by 2.8%, reflecting the previous month's growth.

Although there was a slight easing in Core PCE inflation, the overall inflation rate remains elevated, influencing investor confidence. The persistent inflation above the Federal Reserve's 2% target has instilled caution in the market sentiment.

Investors are now eagerly awaiting insights into potential Federal Reserve actions concerning interest rates, amid apprehensions that higher rates could further dampen market risk appetite.

Bitcoin Price Response to Inflation Data

Despite the recent inflation statistics, Bitcoin witnessed a minor recovery. Following the release of the Personal Consumption Expenditures (PCE) inflation data, Bitcoin's price rose by 0.95% to reach $68,773.23. However, the trading volume remained subdued at $27 billion in the last 24 hours.

Conversely, the U.S. 10-year Bond Yield declined by 0.73% to 4.515%, while the U.S. Dollar Index Futures dropped 0.27% to $104.380. The PCE data announcement has raised concerns about a possible dovish stance from the U.S. Federal Reserve.

As per the CME FedWatch Tool, there is a 99% likelihood that the Federal Reserve will retain its current policy rates at the upcoming June meeting.

Daniel Yan, co-founder of Matrixport, emphasized the significance of the April PCE data in a recent social media post. He proposed that a 0.2% month-on-month increase in both Core PCE and PCE would be favorable for the market, while a 0.3% rise would be negative. A combination scenario, with one measure at 0.2% and the other at 0.3%, would suggest a neutral outlook.

Important Note: This article solely aims to provide information and should not be construed as legal, tax, investment, financial, or any other form of advice.