U.S. Core PCE Data Surprise Sparks Bitcoin Sell-Off as Fed Rate Cut Hopes Diminish

The latest U.S. Core Personal Consumption Expenditures (PCE) data, released above expectations, sent ripples through financial markets, including cryptocurrencies. As the Federal Reserve's preferred inflation gauge, the Core PCE Index rose 0.4% monthly and 2.8% annually in February, surpassing forecasts of 0.3% and 2.7%, respectively. The hotter-than-expected figures dampened hopes for an imminent Fed rate cut, sparking a sell-off in risk-sensitive assets like Bitcoin and altcoins.

Bitcoin, which had been hovering near $85,000 earlier in the day, dipped below $84,000 following the report. Analysts noted that stubborn inflation metrics could delay the Fed's easing cycle, with May rate cut odds now appearing slim. Matt Mena, Crypto Research Strategist at 21Shares, acknowledged the cautious outlook but emphasized Bitcoin's resilience: "Bitcoin continues to prove its durability. It thrives in this exact macro environment—a sovereign, inflation-resistant asset designed to weather market cycles and shield portfolios during uncertainty."

While the PCE data dominated headlines this week, crypto traders are already eyeing April 2. Former U.S. President Donald Trump is set to unveil a new tariff plan, which he dubbed "Liberation Day" for American trade. Though details remain scarce, Trump hinted at possible exemptions for certain countries, framing the strategy around reciprocity while leaving room for flexibility.

Market experts warn that fresh tariffs could inject volatility into crypto markets, especially if trade tensions escalate. However, a conciliatory tone from Trump might instead fuel optimism. For now, Bitcoin's role as a hedge against macroeconomic turbulence keeps it in focus. As investors juggle inflation fears and geopolitical risks, the coming weeks could test crypto's reputation as a haven in stormy seas. ??️