#USMayPCEInflationRisesTo4.1%HighestIn3Years

🌡️ The PCE Has Hit 4.1%. This Is The Federal Reserves Inflation Gauge. It Is At A 3 Year High. Now People Are Taking The July Rate Hike Seriously.

The news came out on Thursday. The market has been reacting exactly like you would expect. I want to explain what the 4.1% PCE actually means for all the assets we are trading now in a way that is easy to understand.

The Personal Consumption Expenditures price index went up by 4.1% over the year in May. This is the highest it has been since April 2023. It is a big jump from the 3.8% we saw in April. The core PCE, which does not include food and energy was at 3.4%. This is the highest it has been since October 2023. Both of these numbers are higher than people thought they would be. They show that the inflation problem is not going away it is actually getting worse.

The PCE is important because it is the number that the Federal Reserve uses to make decisions. Kevin Warsh is the chairman of the Federal Reserve and he has always been very serious about keeping inflation under control. Now that the PCE is at a 3 year high he will probably feel a lot of pressure to do something about it.

The main reason for the PCE is energy prices. There was a conflict in the Middle East that made oil prices go up a lot in May. Even though there is a ceasefire now it will take some time for the inflation numbers to go down. This means that the high PCE will probably stay for another month or two.

When the PCE numbers came out the dollar got stronger. Gold prices went down. The price of Bitcoin also went down to $58,115 before going up to $60,001. All the assets that people buy to protect themselves from inflation got repriced at the time.

For people who invest in crypto this is a problem. When the PCE is high and interest rates are going up it does not make sense to invest in something that's volatile like Bitcoin. This is not just individual people selling it is institutions that are deciding that it is better to invest in something safe.

The only good news is that if the ceasefire in Iran holds and oil prices go down the inflation numbers might get better soon. This could change everything for crypto and other assets.

Until then it is better to be patient and protect your money. The economy is not doing well. It is not a good time to take risks.

With the PCE at 4.1% the dollar at a 1 year high and Bitcoin bouncing off $58,000. Do you think the ceasefire in Iran will make energy prices go down fast to stop a July rate hike and make things better, for crypto this summer?

‍#GateSquare #MacroCrypto @Gate_Square