Bitcoin Climbs Past $85K as Inflation Cools, But Bonds Send Warning

Bitcoin rose above $85,000 after softer inflation data raised hopes the Fed won't hike rates, even as bond yields hit 20-year highs.

Bitcoin is staying calm while Wall Street stumbles. The world's biggest cryptocurrency pushed above $85,000 after fresh U.S. data showed inflation cooling more than expected — good news for investors hoping interest rates won't climb higher.

The key report was the PCE index (Personal Consumption Expenditures — the Federal Reserve's favorite way of measuring how fast prices are rising). It came in below what economists predicted:

Headline PCE: +3.4% over the past year (vs. 3.7% expected)
Core PCE (which ignores volatile food and energy prices): +3.0% (vs. 3.3% expected)

Why does this matter? When inflation cools, the Fed (the U.S. central bank that sets interest rates) is less likely to raise rates. Lower rates usually mean cheaper borrowing and more money flowing into risky assets like Bitcoin. After this data, the chance of an October rate hike dropped, with markets now seeing a 62% chance the Fed holds rates steady.

Bitcoin reacted quickly:

Jumped to a high of $85,598.94
Settled around $84,376, up 0.9%
Total crypto market value sits just under $3 trillion

But the wider picture is shaky. The 10-year Treasury yield (the return investors earn on U.S. government debt) hit around 5.25%, its highest since 2002. Higher yields make safe bonds more attractive than risky bets. Meanwhile, stocks slipped, oil briefly topped $100 amid U.S.–Iran tensions, and consumer confidence hit a 12-year low.

Traders remain cautious about big gains ahead. On the prediction market Myriad, only 7% think Bitcoin will beat its all-time high of $126,199 before 2027 — that would require a roughly 50% jump in three months.

The takeaway: Cooler inflation gave Bitcoin a lift, but 3% is still well above the Fed's 2% target, and rising bond yields are flashing warning signs. Bitcoin is holding firm for now, but the road to new records looks uncertain.

This is an AI-generated summary. Read the original article at: https://decrypt.co/379705/bitcoin-jumps-cool-pce-inflation-data