Bitcoin stable as Fed fave PCE inflation sees first monthly drop in six years
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- Bitcoin held around $64,500 on Thursday as US stocks rebounded from a semiconductor sell-off, with the S&P 500 up 1% and the Nasdaq Composite rising 2.3%.
- June PCE inflation came in at 3.7% year-on-year — in line with expectations and marking the first monthly decline since 2020, down from May's 4.1% peak.
- The Kobeissi Letter flagged that 3.7% is the second-highest PCE reading since October 2024 and nearly double the Fed's 2% target, while Johns Hopkins economist Steve Hanke called inflation "the genie the Fed just can't put back in the bottle."
- The Federal Reserve held rates unchanged at its latest meeting amid an emerging split among FOMC members, while CME's FedWatch tool projects only a 50bps rise over the next year.
- Bitwise CIO Matt Hougan forecast that future Fed rate decisions will have less impact on Bitcoin, citing the narrower expected rate range and predicting new Fed chair Kevin Warsh will echo Alan Greenspan's incremental approach.
Why it matters: Bitcoin's relief bounce rests on a June PCE print of 3.7% — still nearly double the Fed's 2% target, per Hanke's warning. Bitwise CIO Hougan's forecast is the real story: if rate moves stay at the projected 50bps, Bitcoin traders should expect less volatility around future Fed decisions than during past cycles of whole-percentage-point swings.
