Core PCE Index Data to Shape Fed Rate Cut Odds and Crypto Market

The Core PCE Index is one of the most important economic reports in the United States, and it has once again taken center stage today.

Source: X (previously Twitter)

The U.S. Bureau of Economic Analysis is set to release the latest numbers of the U.S. Core PCE Index July 2025 at 14:30 UTC (6 PM IST), and traders across traditional and digital markets are bracing for heavy volatility.

Core PCE Index

This inflation report is often called the Federal Reserve’s favorite inflation gauge because it shapes decisions on future interest rates.

For July, the Core PCE Index is expected to show a 0.3% rise month-over-month and a 2.9% increase year-over-year. These numbers are slightly higher than June, when the yearly figure stood at 2.8%.

Source: Forex Factory

Headline personal consumption expenditure inflation, which includes food and energy, is likely to remain steady at 2.6%.

Why the Core PCE Index Matters

The Federal Reserve uses the Core PCE index data to track inflation more closely than the consumer price index (CPI). A cooler reading than expected could push the central bank toward a Fed rate cut in September, which would be the first such move in months.

Markets are already pricing in a 85% chance of a 25-basis point fed rate cut at the September 16–17 FOMC meeting .

Source: Fed Watch Tool

If the data is softer, risk assets such as Ethereum and Bitcoin can have a bullish rush, as investors tend to move to higher-yielding assets when interest rates decline.

Conversely, a hotter-than-expected reading will be a sign of sticky inflation. That will put pressure on the federal reserve to maintain rates high, which can cool equities as well as the crypto space.

Fed Chair Jerome Powell’s Jackson Hole Outlook

At the Jackson Hole Symposium earlier this month, Jerome Powell struck a more dovish tone than many expected.

He admitted that risks to the labor market were rising and also noted that the effects of Trump tariffs on inflation could be temporary.

Powell’s comments gave investors hope that the Fed might ease its stance in the near future, especially if inflation indicators show signs of slowing.

This is why today’s release of the Core PCE Index carries extra weight. A confirmation of Powell’s outlook would strengthen bets for a September cut, while an upside surprise could quickly erase those hopes.

Impact on the Crypto Market

The crypto market is already showing signs of nervousness ahead of the report.

Bitcoin price has faced large swings this month.

This means that if the fed rate cut happens, the rally could be sharp but the risk of liquidations is equally high.

Source: CoinMarketCap

Bitcoin is now trading at $109,818, with a 2.78% decrease, ethereum is trading at $4335, with a decrease of more than 5% in the last 24 hours.

Ethereum often mirrors Bitcoin’s moves during key macro events.

Traders are expecting volatility either way, making today’s report a major event not just for Wall Street, but also for the digital asset space.

Conclusion

The Core PCE Index release today could decide the market mood for weeks to come. A cooler number may fuel hopes of a Fed rate cut, giving fresh life to Bitcoin and Ethereum.

A higher-than-expected result, however, would reinforce fears of persistent inflation and may limit gains in both the federal reserve outlook and the crypto market.

Disclaimer: This article is for informational purposes only. Investors should (DYOR) do their own research before making market decisions.