Fed’s Favorite Inflation Gauge Just Hit Its Highest Level Since 2023: What It Means for Bitcoin

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April Personal Consumption Expenditures (PCE) inflation matched the 3.8% year-over-year forecast, its highest reading since May 2023. Bitcoin (BTC) slid toward $73,300 as the print pushed the Fed’s preferred gauge further from its 2% target. Core PCE rose 3.3% on the year, also in line with forecasts. Monthly readings came in softer at 0.2%, below the 0.3% estimate and reinforcing the higher-for-longer rate path. PCE Print Confirms Sticky Inflation The Bureau of Economic Analysis released the April Personal Income and Outlays report on Thursday. Headline PCE matched the 3.8% consensus forecast at its highest annual level since May 2023. Core PCE, which excludes food and energy, climbed to 3.3% from a year earlier. The reading sits at its highest level since October 2023 and nearly doubles the Fed’s 2% target. Monthly figures gave doves a small win. Core PCE rose 0.2% in April, below both the 0.3% forecast and the prior month’s pace. Personal income was flat for the month, missing the 0.4% consensus, while consumer spending rose 0.5%. Initial jobless claims came in at 215,000, slightly above the 211,000 expected. Q1 GDP was revised down to 1.6%. Follow us on X to get the latest news as it happens Crypto Pulls Back as Higher-for-Longer Stance Holds Bitcoin traded near $73,404 after the print, down 2.89% over 24 hours. Its market capitalization stood at roughly $1.47 trillion. The slide echoes a recent Bitcoin price drop after hawkish remarks from Fed Governor Christopher Waller. CME FedWatch data showed a 98.9% probability the Federal Reserve holds rates at 3.50% to 3.75% on June 17. Only 1.1% of traders priced in a quarter-point cut. The data extends a higher-for-longer Fed stance that markets have been pricing for weeks. Sticky annual inflation has supported a stronger US dollar and pressured non-yielding assets. The Kobeissi Letter framed the print as a setback for the easing camp. “April PCE inflation, the Fed’s preferred inflation measure, rises to 3.8%, the highest since May 2023. Core PCE inflation rises to 3.3%, the highest since October 2023. The Fed’s top inflation metric is nearly double their target,” analysts at the Kobeissi Letter indicated, framing the print as a setback for the easing camp. Allianz chief economic adviser Mohamed El-Erian offered a more measured read of the broader data mix. “Overall, this morning’s set of US data releases is broadly consistent with consensus forecasts…this data mix is unlikely to significantly alter either the consensus economic narrative or current market levels,” he noted. What Comes Next Forward markets are pricing few cuts for the rest of 2026 after the print. Rising Treasury yields and a firmer dollar have eroded demand for Bitcoin and gold in recent sessions. Traders now watch upcoming nonfarm payrolls and the May CPI release for confirmation. The next key Fed macro events will shape rate-cut odds heading into the second half of 2026. April may mark either a peak or a fresh leg of sticky inflation. The next price and labor data will determine which.

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