🏛️ Markets Are Now Leaning Toward Another Fed Rate Hike Before Year-End Markets are currently pricing in a scenario where the Federal Reserve delivers one more 0.25% rate hike before the end of the year, potentially bringing rates back toward the 3.75%–4% range.

⚠️ However, these expectations could shift significantly after tonight’s U.S. PCE inflation release at 19:30 — the Fed’s preferred inflation gauge.
📊 May PCE forecasts:
• Headline PCE YoY: 4.1% (previous: 3.8%)
• Core PCE YoY: 3.3%–3.4% (previous: 3.3%)
📈 If Core PCE comes in hotter than expected: This would strengthen the view that inflation pressures are genuinely returning — not just temporarily driven by energy prices linked to the Iran conflict. That scenario could:
• increase expectations for further Fed tightening
• push the U.S. dollar even higher
• and add more pressure on assets like Bitcoin and gold
📉 If Core PCE comes in softer than expected:Markets may reduce expectations for additional rate hikes, slowing the DXY rally and potentially supporting a relief rebound in Bitcoin and other risk assets.
🧠 Under Fed Chair Kevin Warsh, the Fed is expected to provide much less forward guidance and allow markets to interpret economic data more independently.
⚡ As a result, tonight’s market reaction to PCE could be far more volatile and unpredictable than in previous years.
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