PCE inflation data pending release, the Federal Reserve remaining on hold has become a certainty—when will the crypto market break through the liquidity dilemma?

【BlockBeats】On January 22, the US Bureau of Economic Analysis will release the latest Personal Consumption Expenditures Price Index (PCE). How this data moves will directly influence the subsequent pace of monetary policy.

Market expectations are clear: the core PCE year-over-year growth rate is likely to stay within the 2.8%-2.9% range, with the overall PCE around 2.7%. At first glance, these numbers don’t seem high, but compared to the Federal Reserve’s 2% long-term target, they are still noticeably elevated. The most concerning aspect is that inflation has shown a “high-level sideways” pattern—neither pushing down nor falling rapidly.

To understand this deadlock, we need to look at the two forces behind US inflation. On one side, tariff costs and some commodity prices are holding the line; on the other side, wage growth is beginning to slow, and rent increases are reversing, putting pressure on service sector inflation. The result is: inflation isn’t worsening further, but it also can’t come down. This state significantly constrains monetary policy space. Coupled with the data lag caused by the previous government shutdown, this PCE is likely to be seen by the market as a “trend confirmation” rather than a policy turning point signal.

The market consensus is already set: there is nearly a 95% probability that the Federal Reserve will keep interest rates unchanged next week. In the short term, the high-interest-rate environment will continue to suppress the valuation space for risk assets, and the correlation between Bitcoin and other risk assets will remain tight.

From a crypto perspective, the issue is actually quite interesting. The high-interest rates are “stuck” at this high level, meaning liquidity is unlikely to improve in the short term. But conversely, if inflation remains sticky in the long run and real interest rates gradually peak, then the story of cryptocurrencies as a hedge against monetary policy uncertainty can continue in the medium to long term. This PCE feels more like a confirmation of the “status quo,” and what can truly shake up the market rhythm depends on whether inflation can break this current deadlock.