JPMorgan Chase and Goldman Sachs have pushed up their forecasts for U.S. Personal Consumption Expenditures (PCE) inflation ahead of Thursday’s key data release, intensifying market focus on the Federal Reserve’s next policy move. Both banks anticipate a hotter inflation print, reinforcing expectations for a cautious Fed amid persistent price pressures.
JPMorgan’s team now projects core PCE, the Fed’s preferred inflation gauge, to accelerate by 0.4% month-on-month in April, well above consensus estimates hovering near 0.3%. This uptick indicates that the consumer price dynamics remain problematic despite an overall slowdown in economic growth. Goldman Sachs echoes these views, highlighting sticky service-sector inflation and resilient shelter costs as major drivers behind the upward revision.
For crypto traders, this matters more than a typical inflation report. Higher inflation readings typically harden the Fed’s stance on interest rates, which feeds into risk sentiment across asset classes. Digital assets, often treated as risk-on plays, tend to grapple under hawkish Fed indicates that tighten liquidity and raise borrowing costs. Recent weeks have already shown volatility spikes following mixed inflation data and hawkish Fed commentary.
Equities also face renewed pressure. The anticipation of tighter monetary policy steers investors toward safe havens and heightens expectations of slower growth. Given the PCE report’s proximity to the upcoming Fed meeting, inflation outcomes will be scrutinized for any sign that the central bank might prolong or accelerate its tightening cycle.
However, there remains room for debate. Some market observers note that supply chain normalization and base effects from last year’s energy price swings could distort short-term inflation readings. Additionally, more muted wage growth could eventually ease the cost pressures on services, cutting through the current headline noise.
The report is scheduled for release on May 29, with market reaction expected to be swift and pronounced. Traders should watch the core PCE figure closely, and any updates on the Fed’s forward guidance, which will crystallize the monetary outlook for the rest of 2026. In crypto markets, the key will be how liquidity conditions adjust post-announcement and whether digital assets sustain recent support levels near $31,000 for Bitcoin or $2,200 for Ethereum.
Overall, the raised inflation forecasts from two of Wall Street’s leading banks add weight to the case for a vigilant Fed. This sets the stage for continued volatility and a potentially tougher environment for risk assets if inflation fails to cool as hoped.
JPMorgan and Goldman Sachs Brace for Elevated U.S. PCE Inflation Before Fed
Wall Street banks JPMorgan and Goldman Sachs anticipate strong U.S. inflation data ahead of the Fed's key PCE report, suggesting potential tighter monetary policy that often pressures crypto markets.