PCE inflation rises to 3.8%, Bitcoin slips near $73k
April PCE inflation rose 3.8% year-over-year, highest since May 2023; core PCE climbed 3.3%. Bitcoin fell near $73,300 as markets trimmed rate-cut expectations.
The Bureau of Economic Analysis reported April Personal Consumption Expenditures inflation rose 3.8% year-over-year, the highest annual reading since May 2023. Core PCE, which excludes food and energy, increased 3.3% from a year earlier.
Monthly figures were softer: core PCE rose 0.2% in April, below the 0.3% estimate, and the overall PCE price index increased 0.4% for the month. Personal income was unchanged in April, consumer spending rose 0.5%, initial jobless claims were 215,000 for the week and first-quarter GDP was revised to an annualized 1.6%.
Market pricing shifted after the release. The CME FedWatch Tool showed a 98.9% probability the Federal Reserve will keep the federal funds rate at 3.50% to 3.75% at the June 17 meeting, with 1.1% of traders pricing a quarter-point cut. Treasury yields rose and the dollar strengthened.
Bitcoin traded near $73,404 after the report, down about 2.9% over 24 hours, with a market capitalization around $1.47 trillion. The digital asset has moved lower in recent sessions amid firmer rate expectations.
Analysts at the Kobeissi Letter wrote, “April PCE inflation, the Fed’s preferred inflation measure, rises to 3.8%, the highest since May 2023. Core PCE inflation rises to 3.3%, the highest since October 2023. The Fed’s top inflation metric is nearly double their target.”
Mohamed El-Erian, Allianz’s chief economic adviser, wrote that the set of U.S. data releases was broadly consistent with forecasts and that the mix was unlikely to significantly alter the economic narrative or current market levels.
Forward markets pared expectations for rate cuts later in 2026 after the PCE print. Traders are focused on the upcoming May Consumer Price Index and the June nonfarm payrolls report for further signals on inflation and the labor market.
The PCE index is the Federal Reserve’s preferred inflation gauge because it covers a wide range of consumer goods and services and adjusts weights as spending patterns change. The Fed’s long-standing inflation target is 2%.
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