Inflation's 4.1% Punch Sends $BTC Tumbling To $58K—Fed's 2% Target Now Doubles As A Dream

Bitcoin extended its slide on Thursday, dropping to a low of around $58,200 after the U.S. Bureau of Economic Analysis reported that the Personal Consumption Expenditures price index climbed 4.1% year over year in May, a three-year high. The reading exceeded the prior 3.8% print, signaling that the Federal Reserve may need to keep monetary policy tighter for longer.

On the month, headline PCE inflation rose 0.4%. Both monthly and annual figures came in below Wall Street estimates of 0.5% and 4.2%, respectively, but the data still weighed on risk assets as inflation remained double the Fed's 2% target. Core PCE, which excludes food and energy, increased 0.3% for the month and 3.4% year over year through May.

At press time, the Bitcoin price was down 4.98% at $58,183.51 on Thursday, June 25. The move triggered $212.35 million in long liquidations for BTC within a one-hour window, according to CoinGlass.

The BEA report also pointed to ongoing robust consumer demand, with spending rising $43.8 billion. The combination of sticky inflation and resilient consumption reinforced expectations that the Fed would hold rates at elevated levels, pressuring speculative assets across the crypto market.