The post Fed Cuts Despite Rising PCE Inflation: Bitcoin, Crypto on Alert appeared on BitcoinEthereumNews.com.

PCE inflation metrics rise with headline at 2.7%, core at 2.9%, and services at 3.3%. Federal Reserve cuts rates despite stalled inflation progress over 16 months. Bitcoin faces downside risk if the Fed reverses policy due to inflation resurgence. The Federal Reserve’s preferred inflation gauge continues to climb despite the central bank’s pivot toward rate cuts. PCE inflation data shows headline inflation at 2.7%, core inflation at 2.9%, and core services inflation at 3.3% as of September 2025, according to analysis from Ecoinometrics. Data reveals inflation has made no progress toward the Fed’s 2% target for at least 16 months. All three major PCE measures have ticked higher in recent readings, creating a challenging backdrop for monetary policy decisions. Inflation is no longer the Fed’s top priority, but it hasn’t stopped rising. PCE inflation (headline, core, and core services) is ticking higher again, with no real progress in over a year. Yet the Fed is still pressing ahead with rate cuts. That’s a risky gamble. pic.twitter.com/lvl5E9Pk4K — ecoinometrics (@ecoinometrics) September 30, 2025 The Fed delivered a 25 basis point rate cut in September 2025, lowering the federal funds rate to the 4.00%-4.25% range. This is the first reduction since December 2024, justified by cooling labor market conditions rather than inflation control. Policy Reversal The primary risk for Bitcoin and cryptocurrency markets stems not from rate cuts themselves but from potential policy reversals. If inflation continues surging, the Fed may need to pause or reverse its easing cycle. Such a shift would cause risk-off sentiment across financial markets quickly. Bitcoin has shown growing correlation with traditional risk assets, which makes it vulnerable to market sell-offs during monetary policy uncertainty. The cryptocurrency’s performance during the current cycle challenges its narrative as an inflation hedge. Price action has tracked equity markets more closely…

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Filed under: News - @ October 1, 2025 4:21 pm