Bitunix Analyst: PCE may indicate that inflation is stuck in a "stalemate," with a high probability that the Federal Reserve will hold steady next week

BlockBeats News, January 22 — The U.S. Bureau of Economic Analysis (BEA) is set to release the latest Personal Consumption Expenditures Price Index (PCE). The market generally expects that core inflation momentum remains insufficient to decline. Consensus forecasts indicate that the core PCE year-over-year growth rate will stay around 2.8%–2.9%, with the overall PCE approximately 2.7% YoY, showing that inflation remains significantly above the Federal Reserve’s 2% long-term target and exhibits a clear “high-level sideways” characteristic.

From a macro perspective, U.S. inflation is in a tug-of-war between bulls and bears. On one hand, tariff-related costs and some commodity prices provide a bottom support for inflation; on the other hand, slowing wage growth and rental price increases are gradually suppressing service sector inflation. This means inflation has not worsened further but also cannot cool down quickly, further constraining monetary policy space. Coupled with the data lag caused by the previous government shutdown, this PCE is more likely to be viewed as a “trend confirmation” reference rather than a key variable to change policy direction. The market consensus has basically formed: the probability that the Federal Reserve will keep interest rates unchanged next week is close to 95%. In the short term, the high-interest-rate environment will continue to constrain risk asset valuations; in the medium term, if inflation remains sticky and the economy does not show significant recession, policy will enter a longer observation period.

Bitunix Analyst: In the crypto market, the “high-level stay” of interest rates means liquidity is unlikely to improve significantly in the short term, and the correlation between Bitcoin and risk assets will persist. However, if inflation cannot effectively decline in the long term and real interest rates gradually peak, cryptocurrencies, as a narrative for hedging monetary policy uncertainty, still have the conditions to reignite. This PCE seems more like a “status quo continuation” confirmation rather than a turning signal; what can truly change the market rhythm is whether the inflation trend can substantially break the current deadlock.