US Inflation: Core PCE Data Below Expectations As Macro Trends Weigh Down Bitcoin

According to data from the US Bureau of Economic Analysis (BEA), the Federal Reserve’s key inflation measure was hotter than expected in March.

The Personal Consumption Expenditures (PCE) price index rose 2.3% from year-ago levels, lower than February’s 2.7% increase.

This reading came in higher than anticipated, as Economists forecasted that the index would rise 2.2%. The inflation data comes amid heightened market uncertainty fueled by Trump’s controversial policy moves.

Implications of the US March Inflation Reading

The Core PCE index, which excludes volatile food and energy prices, fell to 2.6%, which was in line with expectations.

Economists expected the PCE price index to cool in March, likely due to falling energy costs as recession fears weighed on oil prices.

Their expectations materialized as the costs of Energy goods and related services plunged 2.7% in March.

However, food prices saw their most significant jump in months, rising 0.5% from February.

The PCE, which is released monthly, is considered to impact Federal Reserve interest rate decisions. Notably, the latest PCE reading signals inflation is cooling, putting rate cut hopes back on the table.

The central bank has refused to lower rates this year, after dropping them by 50 basis points in September 2024.

A possible rate cut this year would translate into lower borrowing costs on all kinds of loans. Expectedly, this may help relieve pressure on the job market to stay afloat amid disruptions caused by tariffs.

While Trump has imposed a 90-day pause on tariffs, uncertainty persists in the market.

In addition to the tariff, other policies, including cutbacks in federal jobs and mass deportations, add substantial uncertainty to the economy.

How Bitcoin and Other Cryptocurrencies React

The economic data released earlier today fully reflected President Trump’s economic agenda.

Economic activity contracted for the first time in three years in the first quarter.

Bitcoin and other top cryptocurrencies also reacted negatively.

The price of Bitcoin, which climbed above $95,000 on Tuesday, has fallen sharply. In the last 24 hours, the value of Bitcoin dropped by 1.2% to $93,776.

Top altcoins like Ethereum (ETH), XRP, Solana (SOL), and Binance Coin (BNB) also experienced plummeting prices. Over the past day, these digital assets plunged by 2.8%, 5.9%, 3.7%, and 0.9%.

However, the low PCE numbers may drive rate cuts, which often lead to increased volatility in the short term.

Typically, the prices of risk assets like Bitcoin rise afterward due to more liquidity in the market and higher investor risk appetite.

Why Experts Are Optimistic About a Big Rally Ahead

Bitcoin’s latest surge above $95,000 has raised expectations about a significant rally ahead.

Bitcoin is gaining traction thanks to institutional interest, increased retail participation, and positive market sentiment.

Standard Chartered’s crypto research team, led by Geoff Kendrick, made a bold Bitcoin prediction in a late-April 2025 report.

Kendrick’s team targets Bitcoin hitting $120,000 in Q2 2025 and $200,000 by the end of the year.

Kendrick noted that investors are shifting capital away from US stocks and bonds toward alternative assets like Bitcoin.

He believes this trend could trigger a sharp price surge this spring. Rising inflows into the spot Bitcoin market are another key factor spurring a bullish Bitcoin rally.

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