Bitunix Analyst: PCE May Signal Inflation Stuck in 'Transitory Rut,' Fed Unlikely to Act Next Week

BlockBeats News, January 22nd, the U.S. Bureau of Economic Analysis (BEA) is about to release the latest Personal Consumption Expenditures Price Index (PCE), with the market generally expecting that the downward momentum of core inflation is still insufficient. The consensus forecast shows that the core PCE year-on-year growth rate is maintained at around 2.8%–2.9%, with overall PCE year-on-year growth of about 2.7%, indicating that the inflation level is still significantly higher than the Federal Reserve's long-term 2% target and displaying a clear "high-level plateau" characteristic.

From a macro perspective, U.S. inflation is in a tug-of-war between bulls and bears. On the one hand, tariff-related costs and some commodity prices provide a bottom support for inflation; on the other hand, the slowdown in wage growth and the easing of rent increases are gradually suppressing service sector inflation. This situation has prevented inflation from worsening, but it is also difficult to cool down quickly, further constraining the monetary policy space. Coupled with the data timeliness deviation caused by the previous government shutdown, this PCE release is more likely to be seen as a reference for "confirming the trend" rather than a key variable to change policy direction.

At the market level, a consensus has basically been formed: the probability of the Fed maintaining interest rates unchanged next week is close to 95%. In the short term, the high-interest-rate environment will continue to constrain the valuation of risk assets; looking ahead, if inflation remains sticky and the economy does not significantly deteriorate, the policy will enter a longer observation period.

Bitunix Analyst: Regarding the cryptocurrency market, the "high-rate stay" implies that liquidity is unlikely to see significant improvement in the short term, and the correlation between Bitcoin and risk assets will still exist. However, if inflation cannot effectively fall in the long term, and real interest rates gradually peak, cryptocurrency assets, as a medium- to long-term narrative for hedging against policy uncertainty, still have the conditions for a resurgence. This PCE release is more like a confirmation of the status quo rather than a turning point signal; what can truly change the market tempo is whether the inflation trend substantially breaks the current deadlock.