Bitcoin falls to yearly low after Fed's favored inflation gauge hits three-year high
Bitcoin briefly slid to $58,200 on Thursday after fresh US inflation data showed the Federal Reserve’s preferred price gauge climbed to its highest level in more than three years. The Personal Consumption. . .
Bitcoin briefly slid to $58,200 on Thursday after fresh US inflation data showed the Federal Reserve’s preferred price gauge climbed to its highest level in more than three years. The Personal Consumption Expenditures price index rose 4. 1% year over year in May, compared with 3. 8% in April, while the monthly reading remained at 0. 4%, reflecting higher fuel costs despite moderation in other categories. Core inflation, which excludes food and energy, increased to 3. 4% from 3. 3%, indicating that underlying price growth remains considerably lower than the headline figure. The inflation data was broadly in line with market expectations but is likely to reinforce the Fed’s cautious stance as policymakers assess whether inflation is cooling sufficiently to justify lower interest rates. AdvertisementConsumers continued to show resilience despite higher costs. Disposable income increased 0. 7% before inflation and 0. 3% after adjusting for rising prices, while spending advanced 0. 3%. Savings also improved modestly. Meanwhile, the Commerce Department revised US economic growth upward to 2. 1%, citing a smaller-than-previously-estimated impact from imports. Although declining oil prices and improved tanker traffic through the Strait of Hormuz could ease inflationary pressures in coming months, economists say energy is only part of the story. Rising costs for housing, medical services and electricity continue to weigh on consumers and may limit the scope for policy easing this year. Bitcoin erased more than $3,000 in value after the PCE release, falling from above $61,000 to near $58,000, its weakest level this year, CoinGecko data shows. The move pushed the token back to prices last seen in September 2024. As Bitcoin tumbled, losses rippled through the crypto market. Ether slid toward $1,500, Solana dropped to $64, and BNB fell to around $540. This is a developing story. Disclosure:This article was edited by Vivian Nguyen. For more information on how we create and review content, see ourEditorial Policy.