Gushiken Yona
Bitcoin and Shiba Inu (SHIB) ignored a stagnant inflation report Thursday. The Personal Consumption Expenditures (PCE) price index rose 2.8% year-over-year in December.
Key Points
- Federal Reserve PCE data matched estimates at 2.8% YoY on Friday, signaling that inflation remains stagnant above the 2% target.
- Bitcoin held $90,000 and Shiba Inu maintained $0.000008, showing market resilience despite high consumer spending figures.
- Analysts warn that sticky inflation creates a direct conflict between the Fedās mandate and Executive demands for rate cuts.
The Bureau of Economic Analysis reported figures that matched analyst expectations exactly. Digital assets held their ground as market focus moved toward broad central bank strategy. Bitcoin maintained its position near $90,000 during the morning session. SHIB remained steady near $0.000008.
Headline PCE and Core PCE both rose 0.2% month-over-month. The annual rate for both metrics remained at 2.8%. Consumer demand persists. Personal expenditures increased 0.5% in December. Personal income rose 0.3% during the same period. The economy retains enough heat to keep prices elevated. High consumer spending complicates the path for the liquidity injections that typically fuel risk-asset rallies.
Stagnant Inflation and Federal Reserve Realities
Crypto markets typically react with high volatility to data surprises. The lack of a negative shock provides a net positive for the sector this week. Stagnant cooling presents a structural hurdle for digital assets. Inflation remains significantly above the Fedās 2% mandate. The central bank currently lacks the data-driven justification to execute the aggressive rate cuts the market anticipated last year.
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Market analysts observe a fundamental shift in the current narrative. Inflation is not re-accelerating, but it’s also not cooling fast. The market now cares more about how the Federal Reserve handles liquidity guidance than the individual data points. The 2.8% annual reading represents the fastest tempo since April 2024. The trend contradicts the previous narrative regarding a rapid return to price stability.
SHIB Resilience Amid Recovery Phase
Sticky inflation reinforces a challenging environment for high-volatility assets like Shiba Inu. Delayed rate cuts often limit the liquidity boosts that propel meme coin rallies. SHIB mirrored the stability of the broader market on Thursday. Buyers face immediate technical resistance at $0.00000815. Broader market caution heightens the asset’s sensitivity to risk-off sentiment. Persistent high rates could amplify corrections if central bank hawks maintain their current stance.
Shiba Inu holders maintain a defensive posture as the ecosystem recovers from recent technical hurdles. On-chain data confirms that netflows grew over 200% in recent weeks. Token burns removed millions of units from the circulating supply. Active community participation provides a buffer against traditional market pressure. A dovish pivot in Federal Reserve guidance likely creates an upside path for SHIB later in the quarter.
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Political Pressure and the Rate Cut Squeeze
The report arrives as the Federal Reserve faces intensifying pressure from the executive branch. Current data impacts the calculus regarding President Trump’s demands for rate cuts. The administration favors lower borrowing costs to stimulate domestic manufacturing and the housing market. Holding rates high to fight sticky inflation creates a potential for direct confrontation between the Fed and the White House.
Investors are evaluating if the central bank will prioritize its 2% inflation target or capitulate to political liquidity demands. Federal Reserve officials have signaled no immediate appetite for aggressive hikes. Traders are monitoring upcoming Fed meetings for signals of a policy shift. A move toward easing likely pushes SHIB toward the $0.00001 threshold. Continued price stickiness in the traditional economy tests the $0.0000075 support floor.
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YONA GUSHIKEN
Yona brings a decade of experience covering gaming, tech, and blockchain news. As one of the few women in crypto journalism, her mission is to demystify complex technical subjects for a wider audience. Her work blends professional insight with engaging narratives, aiming to educate and entertain.
