The April 2024 PCE inflation report landed worse than expected, with the headline rate hitting 3.8% year-over-year — the highest in two years and nearly double the Fed's 2% target. Core PCE, which strips out food and energy, stayed at 3.3%, its most stubborn reading since October 2023. Bitcoin fell to roughly $73,300 on the news, extending a rough year that's seen it lose about 30% of its value.
Inflation data stokes rate-hike fears
Monthly core PCE did ease to 0.2% in April, a tick below the 0.3% economists had expected. But that small relief wasn't enough to calm markets. The broader picture — inflation stuck well above target for over a year — reinforced the Federal Reserve's cautious stance. CME FedWatch data now shows a 98.9% probability the Fed will hold rates at 3.50%-3.75% at Kevin Warsh's first meeting on June 17. Warsh took over as chair on May 22, succeeding Jerome Powell.
Bitcoin ETF outflows hit nine-day streak
Bitcoin ETFs have been bleeding money. The funds recorded nine consecutive days of outflows, including $229 million on May 28 alone. BlackRock's IBIT accounted for $178 million of that. Combined outflows from Bitcoin and Ethereum ETF products have reached nearly $2.7 billion over a two-week stretch. The selling pressure comes as macro uncertainty weighs on risk assets — crypto especially.
Warsh's first test
Kevin Warsh walks into his first rate decision with the economy sending mixed signals. Inflation is sticky, but monthly core PCE is cooling slightly. The market expects him to hold steady. That outcome is already priced in. The bigger question is how the new chair communicates the path forward. The June 17 meeting will be his first public test — and crypto traders will be watching closely.
