On August 26, Bitcoin (BTC) surged as recent economic statistics from the United States fueled expectations that the Federal Reserve could change course.

The action was a sudden about-face for Bitcoin, which had come under selling pressure hours earlier as markets anticipated indications from Fed Chairman Jerome Powell’s remarks at the Jackson Hole conference. Ethereum surged above $1,660 while Bitcoin surged to $21,500.

The personal consumption index has been made public and it shows a change in personal consumption expenditure of -0.1% MoM. The estimates assumed that the PCE would remain unchanged from last month.

Is PCE a Key Indicator for Bitcoin and Ethereum markets?

The price of goods and services for consumers is tracked by the Personal Consumption Expenditures Price Index. Household expense collection makes up the bulk of PCE. A key indicator of inflation is the PCE, and the Fed will probably consider it when setting interest rates next month.

The Federal Reserve is responsible for managing inflation. The most recent CPI data revealed an increase of 8.5% from the previous year. The data show that inflation is declining even though it is still high. As investors bet on a dovish Fed or perhaps a halt to quantitative tightening, cryptocurrency prices have risen sharply.

The PCE statistics may cause some of the hawkish Fed members to change their positions. James Bullard, president of the St. Louis Fed, supported a 75 basis point increase. The chairman of the Minneapolis Fed, Neel Kashkari, who is typically dovish, also established the expectation for a “Volcker-esque” strategy.

These disappointing PCE numbers, which follow a CPI report that was already weaker than anticipated, may serve to calm the belligerent Fed.