The U.S. Bureau of Economic Analysis is set to release the Personal Consumption Expenditures (PCE) inflation data for November today. This disclosure is expected to increase volatility in global markets as well as in Bitcoin (BTC) and altcoins.
Analysts anticipate a decline in the annual PCE inflation rate from 3% to 2.8%, while the monthly rate is expected to remain unchanged at 0%. The core PCE inflation rate, a key indicator favored by the Federal Reserve for measuring inflation, is projected to rise by 0.2% monthly and drop to 3.3% annually, marking the lowest level since 2021.
Wall Street’s forecasts align with market expectations following Federal Reserve Chair Jerome Powell’s December interest rate decision and subsequent comments, with a 45% chance priced in for the Fed to begin rate cuts in March. The CME FedWatch Tool shows a 71% probability of a 25 basis point rate cut in March. Today’s PCE inflation data could influence these probabilities.
The U.S. Dollar Index (DXY) continues to hover around 101.8, potentially closing the second consecutive week on a decline due to dovish expectations of the Fed’s monetary policy and increased anticipation of rate cuts. Meanwhile, the yield on U.S. 10-year Treasury notes continues to fall, currently at 3.89%, following a drop below 4% last week.
Prospects of the Fed’s interest rate cuts and other macro factors suggest a potential rise in Bitcoin and altcoins. Investors are also focused on the possibility of a significant rally triggered by the approval of a spot Bitcoin ETF and the upcoming Bitcoin block reward halving.
Leading altcoins like Ethereum (ETH), Solana (SOL), BNB, XRP, Cardano (ADA), Avalanche (AVAX), and Polkadot (DOT) started the day with notable gains, fueled by expectations of a “Santa Claus rally.” SOL saw an over 10% increase, surpassing $100, while DOT rose above 9%, crossing the $8 threshold. BNB also moved up by more than 2.5%, exceeding $270. Despite the uptrend in altcoins, Bitcoin has not yet made a significant upward move, falling 0.34% in the last 24 hours to $43,744, with its trading volume down by 18%.