As soon as the core PCE data is released, the market gets tense—this is the inflation indicator the Fed watches most closely, and it directly determines the flow of capital.

Let’s look at what happens if the data comes in higher than expected. Suppose both the previous value and the forecast are set at 2.9%, but the actual data jumps to 3.0% or even higher. That’s a tough story to spin. The market will immediately label the Fed as “hawkish”: Rate cuts? Not a chance—there might even be a further delay. The dollar will start to flex its muscles, Treasury yields will shoot up, and all those cash-burning growth and tech stocks will stall on the spot.

On the flip side, if the data comes in below 2.9%, or matches expectations exactly, the mood instantly relaxes. Once there’s a signal that inflation pressures are receding, people start to believe in the “soft landing” narrative again, and rate cut expectations heat up. At this point, risk assets—whether stocks or crypto—usually get some breathing room and may even rebound. The dollar could weaken instead, and capital will start looking for more aggressive opportunities.

In short, a single number can sway the entire market’s expectations and trigger major portfolio adjustments.