PCE inflation in the USA in May 2025 amounted to 2.3% y/y, which means that it is growing again. What does this mean for cryptocurrencies and fed?
Inflation spends the market at the market with eyelids
Current inflation in most regions around the world has its roots in what the governments did during the Covid -19 pandemic period – they printed money for power! What we see now at the data level shows best what the quantitative loosening leads to too much and how difficult it is to overcome inflation.
We have learned a new reading of consumer inflation in the USA. In May it amounted to 2.3%, in April it was 2.2%, according to data from the Economic Analysis Office of the Trade Department. This is a reading in accordance with forecasts, but experts indicate a revision up of the April reading of the primary 2.1%.
SKOK can also be seen in the base field of the PCE indicator, when calculating which does not take into account food and energy prices – this increased to 2.7% y/r/Rz 2.6% earlier (and here is the revision up by 0.1 percentage points). The reading is in line with the forecasts.
The Economic Analysis Office of the Trade Department also stated that in May 2025 the expenses of American consumers fell by 0.1% month to month.
In response to these messages, the Bitcoin course has fallen, although there is no crash. The increases were simply interrupted and today one bitcoin costs about USD 107,400, which is almost the same as yesterday, but still 3.7% more than 7 days earlier.
What does the Fed say?
Currently, the Fed is facing a dilemma. Theoretically, the geopolitical situation calms down: the US has signed a trade agreement with China and with Great Britain. It is possible that they will soon announce further contracts with other regions of the world. The central bank could return to the cuts of interest rates. However, growing inflation blocks such ideas.
At the same time, at the Fed Watch Tool we see that the market assumes that by the end of the year the feet will fall to the range of 3.5-3.75. This would mean three cuts of 25 PB each. The cuts cycle is to start in September. At least, the Fed Watch Tool users think this scenario as the most likely. This is very good news for cryptocurrencies.
