Crypto Market in Focus as Banks Raise US PCE Forecasts Ahead of Fed Rate Hike Decision

The crypto market is awaiting the Fed rate decision to evaluate whether the central bank is considering a hike at its September gathering. Notably, the Wall Street banks have fueled concerns, raising their forecasts for the upcoming US PCE inflation data, which has further cemented bets on a potential Fed rate hike this month.

Meanwhile, the market is already betting on a hawkish stance by the US central bank with its monetary policy plans. So, here we explore what the Wall Street banks’ predictions are on US inflation and the potential move of the US Federal Reserve.

Wall Street Banks Turn Cautious on US PCE Inflation

Wall Street banks have lifted their forecasts for August core PCE inflation, sparking discussions among crypto market traders. The revisions came after the latest US Consumer Price Index (CPI) data, which came in line with Wall Street expectations.

Amid this, Barclays now expects monthly US core PCE inflation near 0.25%, up from its previous expectations of 0.22%. Goldman Sachs sees the figure at roughly 0.26%, as compared to its prior expectations of 0.24%, while Nomura raised its projection from 0.245% to about 0.278%.

Meanwhile, Bank of America now expects a 0.30% monthly increase in August, up from its pre-CPI forecast of 0.26%. On the other hand, TD Securities has a higher estimate at 0.32% from its prior forecast of 0.24%. Mizuho sees an even wider range based on different calculation methods.