New US inflation report leaves Bitcoin with a problem the Fed cannot solve yet
April PCE inflation stayed too hot for comfort: headline PCE rose 3.8% year over year, near double the Fed’s 2% goal, while core PCE held at 3.3%. The monthly core reading cooled to 0.2%, but the annual figures reinforced expectations that the Fed will stay on hold, with almost no chance of a June rate cut priced in. Markets read this as a liquidity problem, and Bitcoin fell toward $73,000 after the release. Hot inflation keeps real yields elevated and the dollar strong, which usually hurts non-yielding assets like Bitcoin. Pressure is amplified by spot Bitcoin ETF outflows and broader risk aversion. The new Fed chair’s inflation-focused reputation adds to expectations of tight policy. Traders now watch the dollar, Treasury yields, and ETF flows for signs of whether the softer monthly trend or the hotter annual trend will dominate. Energy prices remain a key upside risk ahead of the next PCE release on June 25.
