On January 22nd, the US Bureau of Economic Analysis (BEA) released its delayed Personal Income and Expenditure Report, including the PCE inflation rate for October and November.
According to the print report, headline PCE was 0.2% m/m in both months, October’s headline PCE was 2.7% y/y, and November was 2.8% y/y. Core PCE was also 0.2% compared to the previous month in both months, with core PCE in October being 2.7% compared to the same month last year and 2.8% in November.
Bitcoin’s reaction to this news was surprisingly subdued. BTC traded between approximately $88,454 and $90,283 on January 22nd, rising approximately 0.16% to close at around $89,507.
This lack of trading activity is the main clue to what’s most important about this release. Because this story definitely wasn’t a dramatic inflationary surprise.
The main story here is data quality. Because the shutdown interrupted the part of the pipeline that normally inputs into calculations, BEA needed to expose PCE with patched inputs.
In this situation, it is beneficial to split the macro into three parts that tend to be important for BTC. It is the underlying core inflation pace, the policy path that markets price it into, and often the movement in real yields that provides real power to risk assets.
PCE is traded as an uncertainty event rather than a pure inflation event
PCE is a constructed index built from multiple sources, with CPI serving as a key input for categories that rely on detailed price movements. If part of the input stream is missing, the inflation output becomes more dependent on the estimation choice.
This time, BEA was able to use CPI information from previous and subsequent months and seasonal adjustments to fill in the gaps and smooth out monthly fluctuations.
This is more important than you think. That’s because a monthly core measurement of 0.2% can mean two different things. In a clean month, this is a simple indicator of the pace of inflation for the month. In patched months, it could be a combination of real price movements and statistical interpolation. There is still information in this number, but there is less certainty about what has changed over the month.
An easy way to interpret the January 22 core print is to focus on level and persistence. Core PCE is around 2.8% compared to the previous year, which means the inflation rate is above the target of 2%, and if the monthly pace of 0.2% is repeated, the year-on-year rate tends to remain persistent. This is enough to keep rate cut expectations in check, even without a scary upside surprise.
The next step is to see how the market translates that inflation baseline into the policy path.
The Fed does not react to a single report in isolation, but the market updates its probabilities. In the Jan. 22 announcement, the more important question was whether traders would treat this data as strong enough to delay easing, or uncertain enough to wait for a clearer reading before making big policy bets. Patched releases often lead traders to the latter action, as the confidence is difficult to justify.
Bitcoin typically does not react to the inflation rate itself, but rather to what happens in the interest rate market around it.
Real yield is a clear shorthand for the opportunity cost of holding non-yielding assets, and it also addresses liquidity conditions in a way that is important to the overall risk complex. When the real yield increases, the hurdle rate of BTC increases and the financial situation tends to become tighter. A fall in real yields will reduce the hurdle rate and ease the situation.
That’s why the best way to handle a pesky PCE release is to use it as a context setter and then defer to the judgment of the interest rate market.
A steady path of 0.2% monthly with core rates around 2.8% is not a green light for rapid easing, but neither will it force an immediate repricing if traders do not trust the accuracy of the print. In that world, BTC would often settle for trading on the interest rate market’s follow-through rather than the headline number.
The final part of the PCE framework is what happens next. Once a report is patched, the next clean release will tend to be more important as it may validate or contradict the smoothed path. If the next mild month is even hotter, the previous mild month may appear to be a product of estimation methods.
If the next clean moon arrives similarly, the patched moon will be easier to accept as a reasonable substitute.
Bitcoin’s lack of reaction this week fits that setting. BTC didn’t have a clean shock to digest, there was a significant update, but it came with enough caveats to limit the day’s conviction.
GDP was background noise unless reflected in yields
On the same day, the latest forecast for GDP for the third quarter of 2025 was also announced, with the annual rate revised slightly upward from 4.3% to 4.4%. Its growth effect is usually secondary to Bitcoin unless it moves the bond market.
The reason is simple. GDP can become important through two often contradictory channels. If economic growth is strong, the Fed could become cautious and keep real yields elevated, which is a headwind for BTC, which is typically on the margins. Stronger growth potential could support the market’s overall risk appetite and earnings expectations, and could also support speculative assets. Which side will prevail will depend on what happens to yields, not the GDP headline itself.
In this case, the revised amount was small and the numbers were backward-looking. Therefore, it is not sufficient as a standalone input for BTC. The most useful lesson from this is that a solid growth backdrop gives the Fed room to be patient even if inflation does not fall toward a convincing target. Patched PCE performance is close to 2.8% core YoY, which, combined with strong historical growth, supports a baseline of patience rather than urgency.
This baseline is important because it helps explain why BTC can trade sideways even though the inflation data may seem benign at first glance. If the macro mix is steady growth and persistent core inflation, it will be difficult to aggressively factor in interest rate cuts. This tends to prevent real yields from falling too quickly, which is often a more important lever for Bitcoin than the growth rate itself.
So this week’s practical macro reading is compact. GDP adds some context, but is not the driving force. The key factor is how the inflation story is reflected in yields. If yields rise as growth optimism drives term premiums higher or inflation uncertainty keeps policy expectations firm, BTC could feel weighed down even without scary headlines.
If the market gains confidence that inflation is cooling and yields fall, BTC could hold on and build a bid even if the inflation debate remains muddled.
This week’s PCE print edition provided a useful reminder of how Bitcoin trades in macro terms. The most important part was not the exact tenth of the PCE table, but the reliability of the data behind it and the subsequent reaction of the interest rate market.
BEA published two months’ worth of PCE at once and published them using patched inputs. Therefore, even if the global orientation is still informative, the moon-specific accuracy becomes less reliable. Bitcoin reflected the uncertainty, with a narrow trading range and a small increase from the previous day.
The next clean inflation announcement will be more important than usual as it will confirm whether the patched month is an accurate read of the underlying pace. Until then, the most concrete macro signal for BTC resides in the interest rate market rather than a single line in the January 22nd data dump.
(Tag translation) Bitcoin
