PCE does not create shocks, Bitcoin awaits the market’s verdict from the bond market

The October and November PCE reports released by BEA show that US inflation increased by 0.2% month-over-month in both total PCE and core PCE, bringing the annual growth of core PCE to about 2.8% — still above the Fed’s 2% target. However, since this data was “patched” with estimates due to incomplete inputs, the market views this as a more uncertain event rather than a clear inflation shock.

Bitcoin thus reacted very mildly, mainly moving sideways. The real focus is not on the inflation figures themselves, but on how the interest rate market — especially real yields — interprets the data. Real yields are the key factor determining the opportunity cost of holding BTC and the liquidity conditions for risk assets.

In the context of still-strong economic growth and “sticky” core inflation, the Fed has additional reasons to remain patient rather than rushing to cut interest rates. This limits the likelihood of yields dropping quickly — a factor that is much more important for Bitcoin than the headline inflation or GDP figures.

Conclusion: This PCE report mainly sets the context rather than providing a catalyst. The market is waiting for the next “clean” inflation data to confirm the trend, while the clearest macro signal for Bitcoin still comes from developments in the interest rate market.