US Core PCE Meets Forecasts at 0.3% as GDP Surprise at 2.1% Beats All Estimates

The latest US economic data delivered a mixed but broadly stable picture. Core Personal Consumption Expenditures inflation came in at 0.3% month over month, matching market expectations and ticking slightly above the previous 0.2% reading. Core PCE strips out volatile food and energy prices and is the Federal Reserve’s preferred gauge for tracking underlying inflation trends.

At the same time, the final reading for US GDP growth came in at 2.1% for the quarter well above both the 1.6% forecast and the previous estimate. The stronger than expected number suggests the US economy held up better than many anticipated despite elevated interest rates and persistent inflation concerns.

What This Means for the Fed

With inflation landing exactly where expected and growth coming in stronger, the data gives the Federal Reserve little reason to pivot quickly. Markets will now be watching closely for any signals from upcoming Fed decisions on whether rate hikes remain on the table or whether the stronger growth reading changes the calculus at all.

For crypto markets, which have been under pressure all week from a hawkish Fed and a strong dollar, a soft inflation print was hoped to ease some of that pressure. The steady 0.3% reading is unlikely to shift the Fed’s tone meaningfully in either direction — leaving bitcoin and risk assets in the same uncertain position heading into the weekend.