The U.S. Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, was released on Dec. 5.

It remains one of the most closely watched indicators across financial markets.

PCE Price Index tracks the average prices Americans pay for goods and services, showing how the cost of living changes over time.

The Index also reflects shifts in consumer behavior, such as when people switch to cheaper products.

Ahead of the Dec. 5 PCE release, cryptocurrency analyst Max Crypto shared a bullish outlook, predicting that the headline PCE will hold around 2.9%.

He noted that a figure below 2.9% could trigger a strong bullish reaction, while a higher reading could pressure markets into a short-term correction.

REMINDER ????

???????? US PCE data will drop today at 8:30am ET.

Expectations: 2.9%

➡️ If PCE > 2.9%, bearish for markets

➡️ If PCE = 2.9%, bullish for markets as last month's PCE was also 2.9%

➡️ If PCE < 2.9%, very bullish for markets. pic.twitter.com/s881LvSPW4

— Max Crypto (@MaxCrypto) December 5, 2025

The previous PCE data, released on Sept. 26, showed inflation holding firm at 2.7% year-on-year, with core PCE at 2.9%.

Citi and Goldman Sachs expect inflation to remain steady but slightly above the previous month’s pace.

Citi projects the headline PCE to rise 0.29% month-over-month and 2.8% year-over-year.

Headline PCE measures the average change in prices for all goods and services purchased by U.S. consumers. It includes everything people spend money on, such as food, energy, housing, healthcare, and transportation.

Citi predicts core PCE, which excludes food and energy, to increase 0.19% month-over-month and 2.8% year-over-year.

Goldman Sachs shares a similar outlook for the headline figure, predicting a 0.29% monthly and 2.8% annual rise, but sees core PCE slightly higher at 0.22% month-over-month and 2.9% year-over-year.

The U.S. Bureau of Economic Analysis (BEA) published the September PCE inflation data on Dec. 5, following a delay caused by the recent government shutdown.

As per the release, headline PCE clocked 2.8%, in line with expectations while core PCE inflation fell to 2.8%, below the expectations of 2.9%. This indicates that inflation is continuing to cool.

As per CME's FedWatch data, the chances of a rate cut in the upcoming December FOMC meeting stand at 87.2%.

The next scheduled release, covering December’s PCE data, is expected at the end of January 2026.

A hotter-than-expected PCE index suggests that inflation is rising; investors typically anticipate that the Fed will keep interest rates elevated for longer.

This often strengthens the U.S. dollar (DXY) and pressures risk assets, including crypto. As a result, BTC and major altcoins may decline as liquidity tightens and risk appetite fades.

However, a cooler-than-expected PCE reading signals easing inflation, prompting markets to price in earlier rate cuts.

The broader crypto market continued to trade in the red, according to CoinGecko.

Bitcoin (BTC) fell 3.3% over the past 24 hours to $89,622.89.

Ethereum (ETH) dropped 4.1% to $3,074.62

Solana (SOL) lost 5.9% to $134.58.

XRP declined 3.6% to $2.07.

This story was originally published by TheStreet on Dec 5, 2025, where it first appeared in the Federal Reserve & FOMC News section. Add TheStreet as a Preferred Source by clicking here.