PCE inflation falls to lowest level in more than a year

The US PCE inflation index, a key measure of price increases, has fallen again. With a monthly increase of just 0.1%, the index reached its lowest level in over a year. This figure came in below expectations and indicates that inflationary pressure is easing further.

Michaël van de Poppe reacted enthusiastically to the new data, seeing it as a positive signal for risky assets. According to him, inflation should now decline further, making it favourable to invest in growth assets such as cryptocurrencies.

Macroeconomic Signals Improve

The lower PCE reading does not stand alone. The annual PCE inflation index stands at 3.7%, exactly in line with expectations. This indicates stabilisation of inflationary pressure at the current level.

At the same time, other economic indicators give mixed signals. The US gross domestic product (GDP) for the second quarter rose by only 1.5%, significantly less than forecast. Economists had expected growth of 2.1%. This points to a slowdown in economic activity.

Implications for the Crypto Market

Falling inflation figures could be favourable for cryptocurrencies and other risky assets. Lower inflation may mean that central banks need to intervene less quickly with interest rate hikes. This typically leads to greater risk appetite among investors.

However, the disappointing growth data temper this picture. A weaker economy could also prompt caution. For cryptocurrency investors, this means that the coming economic decisions of the Federal Reserve remain crucial for the market direction.