The U.S. May core PCE price index has risen unexpectedly, which may influence economic policies and risk assets.
Rise of PCE Index and Its Impact on the Market
The U.S. May core PCE price index recorded an increase of 0.2% month-on-month and 2.7% year-on-year, exceeding expectations of 0.1% and 2.6%, respectively. This unexpected rise could influence the Federal Reserve's policy and impact risk assets, including cryptocurrencies.
Analysts note that "historically, high inflation results in increased volatility and sell-offs in cryptocurrency markets."
Bitcoin and Ethereum Stability Amid Inflation Fears
Despite the rise in the PCE index, current market reactions indicate no direct correlation between the PCE data and immediate cryptocurrency price adjustments. Bitcoin is priced at $107,412.17 with a market cap of $2.14 trillion, accounting for 64.90% of the market. It shows a 3.64% growth over the past week, although trading volume decreased by 2.42%.
Future Predictions and Market Observations
The Coincu research team highlights potential ripple effects of higher inflation on digital currencies, emphasizing that "historically, elevated inflation and tightening policies triggered volatility." Monitoring structural economic adjustments and regulatory updates is suggested for anticipating asset behavior amid changing conditions.
The rise of the U.S. May core PCE index raises concerns about potential changes in monetary policy, which may reflect on cryptocurrency markets. Monitoring current economic conditions and their impact on assets remains crucial.
