Next week, the "Fed's favorite inflation indicator" will dominate the market and may affect the trend of Bitcoin!

At 20:30 next Friday night, the core PCE indicator, the Fed's favorite inflation indicator, will be released, and it is expected to rise by 0.2%, which will be the smallest increase so far this year. If so, it will rekindle speculation about the Fed's interest rate cut, which will affect the trend of Bitcoin.

The Fed has been hesitant to cut interest rates before, mainly because Powell believes that more evidence is needed to prove that inflation has fallen back to the target level of 2% before it can cut interest rates. The data that proves this is not CPI, but PCE.

Many friends may not understand the difference between CPI and PCE. Let me explain it briefly:

1) First, the composition of CPI and PCE is different. The most relevant example is housing prices, which account for a large proportion of housing prices in CPI; while health care expenses account for a high proportion of PCE.

2) Secondly, CPI focuses on reflecting changes in urban residents' consumer prices, while PCE takes into account the consumption of rural residents, government and other non-profit organizations, so the weights of many items are very different from CPI.

Therefore, the Fed believes that PCE is better than CPI, and the weight of PCE covers a wider range.

According to CME data, the probability of the Fed keeping interest rates unchanged in June is 99.1%, and the probability of raising interest rates by 25 basis points is 0.9%. There is a high probability that there will be no interest rate cuts in June. Now we are waiting for the PCE data to see whether the probability of a rate cut in September can be increased.

Follow me and surpass others with cognition!

#5月市场关键事件 #美联储何时降息？ $BTC