The US November PCE report released last night shows that inflation is under control, and Federal Reserve officials expect a significant decrease in interest rates next year, which has also driven a rebound in the US stock market and cryptocurrency market. (Background: Double trouble for stocks and cryptocurrencies! The Fed is expected to cut rates by only 0.25 next year, and Tesla plummeted 8% as US stocks crashed) (Background information: Bitcoin dropped to $96,000, with 300,000 people liquidating a billion dollars! Analysts: The Fed's slowdown in rate cuts does not change BTC's upward trend) Last night (20th), the US Department of Commerce released the November Personal Consumption Expenditures Price Index (PCE), showing that the overall PCE deflator in the US rose by 0.1% month-on-month in November, lower than the previous market expectation and the previous value of 0.2%; the year-on-year increase was 2.4%, slightly higher than the previous value of 2.3%, but lower than the market expectation of 2.5%. Additionally, the core PCE index for November rose by 0.1% month-on-month, lower than the expected 0.2% and the previous value of 0.3%; the year-on-year increase was 2.8%, the same as the previous value but lower than the market expectation of 2.9%. Overall, the US November PCE index was significantly below expectations, indicating that inflation is under control. In response, the financial website Forexlive commented: Estimates based on the consumer price index and other data indicate that the PCE index increased by 2.4% year-on-year over the 12 months ending in November, while the core PCE increased by 2.8% year-on-year. This is an unexpectedly comprehensive cooling report, with the dollar being sold off and bonds rebounding. The dollar index saw a pullback last night (20th) after the PCE report was released. Source: TradingView Federal Reserve officials: Interest rates may decline significantly in the next 12 to 18 months After the PCE report was released, Federal Reserve official Goolsbee predicted that interest rates could decline significantly in the next 12 to 18 months: The inflation rate is still expected to reach the Fed's 2% target, and today's data shows that the recent rise in inflation is just a bump. My forecast is that the interest rate path in 2025 will be slightly lower. Interest rates may decline significantly in the next 12 to 18 months; the current policy rate is limited, and the policy rate is still far from reaching the neutral rate. Additionally, another Fed official Williams stated that recent data is consistent with the Fed's forecast, indicating that the economy is doing well, but growth is expected to slow to 2% next year. US stocks rally Due to the Fed announcing a 0.25 rate cut on the 19th of this week, it also indicated that the pace of rate cuts next year is expected to decrease from 4 times to 2 times, leading to a crash in the stock and cryptocurrency markets. However, after the PCE report was released last night, the US stock market responded positively, with all four major indices rising: Dow Jones Industrial Average: Up 0.92%, or 391.59 points, at 42,749.87 points S&P 500 Index: Up 0.85%, or 49.98 points, at 5,917.06 points Nasdaq Index: Up 0.81%, or 155.67 points, at 19,528.44 points Philadelphia Semiconductor Index: Up 1.69%, or 82.62 points, at 4,976.45 points Bitcoin rebounds Similarly, the cryptocurrency market also saw a rebound, with Bitcoin rapidly rising from $92,268 to over $97,000 around 20:15 last night, reporting $96,980 at the time of writing, with a nearly 24-hour decline narrowing to 3.24%. Bitcoin trend. Source: OKX Additionally, altcoins like Ethereum also showed a recovery, with ETH returning above $3,300 and SOL breaking above $190; the declines have narrowed following the release of the PCE report. Source: CoinGecko Related reports Countdown to the US government shutdown: Trump advocates for the complete removal of the federal debt ceiling Arthur Hayes: The crypto market is expected to crash on 1/20, and Trump will use the devaluation of the dollar to boost the US economy A member of Congress from Ohio proposes a Bitcoin reserve bill: The speed of the dollar's devaluation is accelerating, and BTC is needed to protect tax revenue "The US November PCE index is significantly below expectations! Is inflation under control? Federal Reserve officials expect a significant decrease in interest rates next year" This article was first published on BlockTempo (the most influential blockchain news media).

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