Fresh US inflation data dealt a blow to hopes for lower interest rates. The report said PCE came in at 3.5% and Core PCE at 3.2%, while GDP growth had already slowed to 2%. That mix matters. Growth is losing steam, but price pressures remain elevated, leaving the Federal Reserve facing the kind of setup it least wants to see.
Sticky inflation reshapes rate expectations
According to the article, the 15:30 data release confirmed that inflation is still proving stubborn. Both PCE readings stayed high enough to keep policymakers cautious, even as economic momentum softened. For markets, this shifts the rate path. Trades built around the idea of policy easing now have to absorb the chance that cuts may be delayed or scaled back.
The report said this environment increases the odds that interest rates stay higher for longer. In a more severe outcome, rates could even move higher again. That is a difficult backdrop for risk assets such as cryptocurrencies and equities, where valuations and positioning tend to suffer when financing conditions remain tight.
Trump remarks add another layer of uncertainty
Beyond the macro data, the piece highlighted sharp comments from Trump directed at the German Chancellor, with criticism extending to NATO more broadly. The article linked those remarks to tensions tied to Iran, while also referencing the war between Russia and Ukraine, migration, and energy issues. The message from the report was clear: geopolitical strains are not easing.
Those statements are expected to remain a live issue in the months ahead. Friction stretching from Iran to Ukraine, combined with public remarks from political leaders, is adding to uncertainty across global markets. The effects are not limited to traditional safe-haven assets; crypto is also part of that reaction function, especially when traders are already on edge.
Advisor pushes back on hikes, markets focus on the Fed
Trump’s senior economic advisor Kevin Hassett said in a live interview that it would be a policy mistake for both the ECB and the Fed to raise rates. He also argued that productivity gains could keep core inflation under control and that new home construction could lift growth to 4% to 5%. Even so, the latest inflation print kept attention fixed on current data rather than optimistic projections.
The report also noted that oil had slipped below $110 for the time being, though it warned that stronger official messaging over the weekend could stir more volatility in energy markets. With central bank policy, inflation, and geopolitical tensions moving at the same time, investors are left facing a highly uncertain backdrop. For crypto markets, the fading rate-cut narrative remains the most immediate pressure point.