HTX DeepThink: Core PCE Diverges from CPI Widening, Signaling Structural Opportunity Within Crypto Market Bearishness

BlockBeats News, May 29th. Chloe (@ChloeTalk1), HTX DeepThink columnist and HTX Research analyst, pointed out that the current cryptocurrency market is in a more complex macro pricing environment. The divergence of the two core inflation indicators in the United States is widening: Core PCE rising to 3.3% and Core CPI at 2.8%. While inflation may not seem to be spiraling out of control on the surface, the divergence is weakening market expectations of a rate cut as the Fed places more emphasis on the PCE metric, which remains significantly above the 2% policy target.

This change coincides with Kevin Warsh taking over as Fed Chair, further complicating policy communication. Previously, the market had some expectations of a "quicker shift to dovishness after the new Chair's appointment," especially against the backdrop of the Trump administration's clear desire for a rate cut. Risk assets had temporarily favored an early shift in liquidity. However, the latest PCE data implies that the Fed will find it challenging to signal dovishness swiftly while inflation remains sticky.

Of more interest is that the current inflationary pressure is not solely driven by traditional consumer demand but by a combination of energy costs, tariffs, and AI capital expenditure expansion. The rise in AI-related software and equipment prices, along with an increase in food service prices, combined with energy cost pressures from the Iran conflict, means that the PCE can better reflect structural price pressures in the current economy compared to the CPI. This suggests that even though the CPI may appear relatively tame, the Fed may still maintain a cautious stance.

For the cryptocurrency market, this is not necessarily entirely bearish but rather a phase of liquidity expectation repricing. In the short term, BTC and mainstream assets will still face pressure from the diminishing rate cut expectations, high real interest rates, and a strengthening dollar. However, if inflation is mainly driven by supply shocks and structural capital spending rather than overall demand overheating, the market may not necessarily plunge into a deep bear market but could instead experience a high-volatility, strongly differentiated, and narrative-driven environment.