Cryptocurrencies, stocks, and other risky assets received another catalyst on Friday, Sept. 27, after the U.S. government published encouraging inflation data.
US PCE inflation dropped in August
Bitcoin Bitcoin
btc
1.98%
Bitcoin held steady above $65,000 while altcoins like Wormhole (W), Floki FLOKI
floki
17.6%
FLOKI, Pepe (PEPE), and Shiba Inu Shiba Inu
shib
19.65%
Shiba Inu jumped by over 15%. Futures tied to the Dow Jones, S&P 500, and Nasdaq 100 rose by over 25 basis points.
Data from the statistics agency showed that personal consumption expenditure dropped from 0.2% in July to 0.1% in August, lower than the expected 0.2%. Year-over-year, it fell from 2.5% to 2.2%, marking the lowest point in over two years.
Core PCE, which excludes volatile food and energy prices, also fell from 0.2% to 0.1% during the month.
These numbers suggest that the Federal Reserve is nearing its inflation target of 2.0%. As a result, the bank will likely continue cutting interest rates in the final two meetings of the year, as the unemployment rate remains above 4%. The Fed had already slashed rates by 0.50% in its last meeting.
Other global central banks, including the Swiss National Bank, European Central Bank, and the Bank of England, have also adopted a dovish tone.
Historically, cryptocurrencies like Bitcoin, Ethereum, and Shiba Inu have performed well when the Fed is cutting interest rates.
