PCE data stabilizes the Federal Reserve's decision to hold steady, and the crypto market enters a period of policy certainty

U.S. November Core PCE Price Index Rose 0.2% MoM and 2.8% YoY, Meeting Market Expectations. According to the latest news, the Federal Reserve seems prepared to keep interest rates unchanged at next week’s policy meeting. What does this series of signals imply? What does it mean for the crypto market?

The Inflation Story Behind PCE Data

PCE is the inflation measure most favored by the Federal Reserve, and it is more valued by officials than CPI. The November data shows that inflation pressures are basically stable—core PCE increased by 0.2% month-over-month and 2.8% year-over-year.

It is important to note that these data were delayed due to the government shutdown, reflecting the situation from November last year. Although the data meets expectations, the timeliness issue may reduce the importance that Fed officials place on this data when making policy decisions.

Data Comparison

The Policy Signal of the Fed Holding Interest Rates Steady

Next week, the Fed maintaining interest rates indicates a current policy stability orientation. The logic behind this decision is quite clear:

• Inflation data meets expectations, with no unexpected upward pressure
• The current interest rate level is already relatively stable, with no urgent adjustments needed
• Policy makers prefer to observe more real-time data before making decisions

This means the market can expect no significant changes in interest rate policy in the near future. For risk assets, this is both certainty and a lack of new stimulus.

The Dual Implications for the Crypto Market

Benefits of Stable Expectations

Strong policy certainty usually helps stabilize risk asset valuations. The crypto market has been highly correlated with Fed policy over the past few years; maintaining interest rates means no sudden liquidity tightening.

Challenges of Lack of New Stimuli

On the other hand, keeping interest rates unchanged also means no new policy dividends. If the market expects rate cuts to stimulate risk appetite, this decision might disappoint some investors. As high-risk assets, cryptocurrencies are sensitive to interest rate changes.

Key Takeaways

U.S. November PCE data remains stable and in line with expectations, reflecting that inflation pressures are largely manageable. The Fed’s decision to keep interest rates unchanged next week reinforces policy stability but also indicates no new policy stimulus in the short term. For the crypto market, this period is characterized by strong policy certainty but limited new opportunities—markets need to be driven by fundamentals rather than policy dividends.