Fed September Rate Hike Odds Rise After Core PCE: Bitcoin, Gold, and Stock Brace for Jackson Hole

The latest Personal Consumption Expenditures data released on August 26, 2026, showed headline inflation remaining elevated at 3.7% year-over-year and core PCE steady at 3.3%, according to the Bureau of Economic Analysis. These figures, slightly firmer than some forecasts on the headline side, prompted an immediate recalibration in interest-rate futures. Traders using the CME FedWatch tool raised the probability of a 25-basis-point increase at the September 15-16 Federal Open Market Committee meeting to roughly 38-44%, up from the mid-30% range earlier in the week.

A hold at the current 3.50%-3.75% target range remains the base case, yet the direction of movement has focused attention on the upcoming Jackson Hole Economic Policy Symposium. Persistent core inflation above the Federal Reserve’s 2% goal, combined with Chair Kevin Warsh’s first major public remarks as leader of the central bank, is forcing Bitcoin, gold, and equity markets to reassess the likelihood of tighter policy later this year and the implications for liquidity and risk assets.

Core PCE Reading Confirms Limited Progress on Underlying Price Pressures

The July core Personal Consumption Expenditures price index advanced 0.2% from the prior month and 3.3% from a year earlier, matching the June annual rate and aligning with consensus estimates. Headline PCE rose 0.2% month-over-month and 3.7% year-over-year, a touch above the 3.6% expectation cited by several forecasters. Goods prices eased on the month, helped by declines in energy-related categories, while services continued to contribute the bulk of the increase. Personal income grew 0.4%, and spending rose modestly, though real consumer outlays showed signs of stalling after stronger earlier months.