Rates stayed unchanged at today’s FOMC after markets had priced a 90% hold, but inflation data is still the risk: PPI y/y printed 6.35%, headline PCE for tomorrow is expected at 3.6% vs 3.4% last month, and oil’s rebound is framed as feeding inflation broadly. Bitcoin’s setup is laid out as a sequence: a second weekly close below 83K, then the Fed holding today, then a hot PCE print next. If headline PCE comes in at or above 3.6%, Treasury yields are expected to spike on the long end.
Markets priced a 90% chance the Fed would hold rates steady at today’s FOMC, and the Fed did not raise rates.
PPI year-over-year came in at 6.35% and was described as moving up.
Fed officials’ expectations imply another rate hike, but the Fed waited until December instead of raising rates in October.
Core PCE and headline PCE are scheduled for tomorrow, with headline PCE expected at 3.6% versus 3.4% last month.
Oil price increases were described as significantly contributing to rising inflation across multiple areas.
WTI made a final high in May, dropped into July, and then started moving back up.
PCE could come in hot tomorrow similar to PPI, with 3.6% framed as the most likely outcome.
The proposed sequence is: BTC’s second weekly close below 83K, the Fed holding rates steady today, then a hot PCE print next.
If PCE comes in hot, the long end of the Treasury curve is expected to spike upward.
The immediate market question is whether tomorrow’s PCE confirms the inflation acceleration already seen in PPI and oil.