Bitunix analyst: On the eve of the PCE test, global assets are ushering in a true moment of price discovery

BlockBeats News, June 25 — The focus of global markets has shifted away from whether the Middle East conflict will escalate. Instead, as energy risks gradually subside, the main variable now is whether US inflation will once again become the dominant factor influencing asset prices. With continued technical consultations between the US and Iran and the rapid recovery of traffic in the Strait of Hormuz, market risk aversion has clearly eased. However, capital has not returned to the narrative of monetary easing — instead, it is beginning to reprice the environment of higher funding costs.

The market is currently highly focused on the forthcoming May PCE data. According to forecasts from major Wall Street institutions, both overall PCE and core PCE are almost unanimously expected to rise further compared to the previous month. What truly worries the market is not energy prices, but the persistent stickiness of core inflation. If core prices continue to strengthen, it indicates that the inflation problem is shifting from being driven by geopolitical shocks to structural factors. The pressure on the Federal Reserve to maintain high interest rates — or even raise them again — will rise accordingly.

There have also been clear changes in recent market pricing. US Treasury Secretary Besent once again emphasized the dollar’s dominant position and publicly supported Walsh’s approach to downplay forward guidance. This suggests the Federal Reserve may further reduce policy predictability in the future, instead making data-driven decisions and letting the market determine interest rates. From bond yield curve flattening, the dollar staying strong, to both gold and silver pulling back simultaneously, all point to capital reassessing the risk that high interest rate environments may last longer.

On the other hand, Micron’s impressive earnings report has led to a rise in global semiconductor stocks, and TSMC’s advanced process is reported to be seeing comprehensive price increases, reflecting the ongoing investment boom in AI infrastructure. However, whether technology stocks and the AI industry chain can continue to absorb higher capital costs will become a key focus for the market in the second half of the year. Currently, the market is not lacking growth stories; rather, it is evaluating whether these growth stories are enough to counterbalance higher discount rates.

For the crypto market, the biggest short-term risk and opportunity both stem from the PCE data itself. If inflation again exceeds expectations, bets on interest rate hikes could heat up further, drawing capital back to the dollar and short-term bond yields. Conversely, if inflationary pressure begins to ease, risk assets may catch a breather. In the coming days, the key focus for market trading will not be the Middle East issue, but rather whether the Federal Reserve has reason to pick up the rate hike tool again. When the market starts trading policy risk rather than war risk, the source of asset price volatility will also fundamentally change.