April PCE Tops 3.8%, Bitcoin Slides Toward $73K

The Bureau of Economic Analysis released the April Personal Income and Outlays report on Thursday. Headline Personal Consumption Expenditures inflation rose 3.8% year-over-year, the strongest annual reading since May 2023. Core PCE, which excludes food and energy, increased 3.3% from a year earlier.

On a monthly basis, core PCE advanced 0.2% in April, below the 0.3% estimate. Personal income was unchanged for the month, while consumer spending climbed 0.5%. Initial jobless claims were reported at 215,000 for the week, slightly above expectations. The report also included a downward revision to first-quarter GDP growth to an annualized 1.6%.

Markets reacted quickly. Bitcoin traded near $73,404 after the report, down about 2.9% over 24 hours and trimming its market capitalization to roughly $1.47 trillion. Crypto prices had earlier moved lower following hawkish comments from a Federal Reserve governor.

Interest-rate expectations shifted toward fewer cuts. The CME FedWatch Tool showed a 98.9% probability the Fed will hold its policy rate at 3.50%–3.75% at the June 17 meeting, with only about 1.1% of traders pricing a quarter-point reduction. Higher Treasury yields and a firmer dollar pressured assets that do not pay interest, including Bitcoin and gold.

Analysts at the Kobeissi Letter wrote that the April readings leave the Fed’s preferred inflation gauge substantially above the central bank’s 2% target. Mohamed El-Erian, Allianz’s chief economic adviser, described the set of U.S. data as broadly consistent with consensus forecasts and unlikely to change market levels materially.

Forward markets currently signal few rate cuts for the remainder of 2026. Traders will watch upcoming nonfarm payrolls and the May consumer price index for further confirmation of inflation and labor trends. The PCE price index is the Federal Reserve’s preferred inflation measure because it covers a wide range of consumer spending and adjusts for changing consumption patterns.