What happened?
The U.S. Core PCE Price Index — the Fed’s preferred inflation gauge — was 2.9% year‑over‑year in August 2025, matching expectations while headline PCE rose 2.7% YoY and 0.3% month‑to‑month. That print suggests inflation is cooling but not gone, and it followed a recent 25‑basis‑point Fed rate cut. The data keeps price pressure in check and leaves room for the Fed to focus on the labor market and possible further easing.
Who does this affect?
Risk‑asset investors, especially Bitcoin and crypto traders, were hit immediately as BTC slid nearly 4% and more than $1.5 billion in leveraged positions were liquidated amid macro moves. Leveraged traders and short‑term technical traders are most exposed, while equity and bond markets also react to shifting Fed expectations. Ordinary consumers and businesses watch too, because changes in Fed policy affect borrowing costs, spending, and overall economic resilience.
Why does this matter?
Because core inflation came in exactly as expected, it raises the chance the Fed can keep easing, which is generally bullish for risk assets and helps sustain a market rally. But in the short term Bitcoin faces real technical risk — it needs to hold about $107k or it could revisit $100k or even $93k, while upside is capped until $112k–$113k is cleared — so volatility could continue. In sum, cooler inflation boosts odds of more rate cuts (market odds for October rose toward ~81%), supporting risk‑on sentiment, yet markets remain fragile and may see more choppy trading before a clear uptrend returns.