Economic data released in the United States on Wednesday has raised red flags as Core PCE inflation has increased to 2.8% for October.<\/p>\n
The Personal Consumption Expenditures report reflects the average amount of money consumers spend monthly and is used by central bank policymakers as their primary inflation gauge.<\/p>\n
\u201cThe Fed\u2019s worst nightmare is officially here,\u201d exclaimed the Kobeissi Letter, which added that this week\u2019s data<\/a> confirms that all three inflation metrics are back on the rise.<\/p>\n These reports have been indicating a rising cost of living in the US since July, and now all three inflation gauges are increasing as well, it revealed.<\/p>\n \u201cFor the first time since February 2022, Core CPI, PCE, and PPI inflation are now rising at the SAME time.\u201d<\/p>\n It added that the clear \u201celephant in the room\u201d is that inflation has leveled off above the Fed\u2019s 2% target.<\/p>\n The Fed\u2019s worst nightmare is officially here:<\/p>\n Today\u2019s data confirms ALL 3 inflation metrics are back on the rise.<\/p>\n For the first time since February 2022, Core CPI, PCE and PPI inflation are now rising at the SAME time.<\/p>\n Did the Fed spark a new wave of inflation?<\/p>\n (a thread)<\/p>\n \u2014 The Kobeissi Letter (@KobeissiLetter) November 27, 2024<\/a><\/p>\n\n Kobeissi added that the Core CPI has been above 3% for 42 consecutive months, the longest streak since the early 1990s, \u201cwhich effectively means we have compounding inflation.\u201d<\/p>\n President-elect Donald Trump\u2019s proposed tariffs on China, Canada, and Mexico could also increase consumer prices and push inflation back up.<\/p>\n This week, Goldman Sachs economists predicted that tariffs would directly impact Personal Consumption Expenditures.<\/p>\n \u201cUsing our rule of thumb that every 1% increase in the effective tariff rate would raise core PCE by 0.1%, we estimate that the proposed tariff increases would boost core PCE prices by 0.9% if implemented,\u201d they wrote<\/a>.<\/p>\n Increasing inflation means the Federal Reserve could pivot back to a hawkish stance in halting interest rate reductions or even increasing rates again.<\/p>\n After starting rate cuts with a 50 basis point cut for the first time in 2008, the Fed is now worried with chair Jerome Powell, who recently said the central banks were \u201cnot in a hurry\u201d to cut rates<\/a>.<\/p>\n High interest rates are usually bad news for risk-on assets such as crypto since lower-risk cash-related investments become more attractive. Additionally, higher rates mean lower liquidity and excess money for investing as there is less borrowing.<\/p>\n Nevertheless, crypto markets continued to march higher this week, with total capitalization hitting $3.5 trillion again, primarily driven by Ethereum and altcoins.<\/p>\n The bullish momentum from a new pro-crypto administration<\/a> and major institutional acceptance and investment could be enough to overcome a hawkish pivot by the US central bank.<\/p>\n The post US Inflation Rises Again, Could Hawkish Fed Pivot Curb Crypto Bull Market?<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Economic data released in the United States on Wednesday has raised red flags as Core PCE inflation has increased to 2.8% for October. The Personal Consumption Expenditures report reflects the average amount of money consumers spend monthly and is used by central bank policymakers as their primary inflation gauge. \u201cThe Fed\u2019s worst nightmare is officially […]<\/p>\n","protected":false},"author":0,"featured_media":24210,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-24209","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/24209"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24209"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/24209\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/24210"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24209"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24209"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24209"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Compounding Inflation<\/h2>\n
Impact on Crypto<\/h2>\n