Bitcoin BTC +1.72% traded flat over the past 24 hours, despite stocks edging higher as investors digested new personal consumption expenditures (PCE) price index data, which showed inflation is cooling.

After the opening bell in New York, equity indices went green. The Dow Jones Industrial Average, S&P 500 and Nasdaq-100  increased 0.23%, 0.39% and 0.55%, respectively. In contrast to this, bitcoin, the largest digital asset by market cap, was changing hands at around $61,640 at the time of writing, having traded flat in the past 24 hours, according to The Block’s price page. 

The morning equity rally comes after Friday's U.S. Commerce Department report showed that inflation in May slowed to its lowest annual rate since 2021. The core PCE index, which excludes the more volatile food and energy prices, rose by only 0.1% last month and by 2.6% over the past year, matching economists estimations.

Inflation data weighs on Fed rate decisions

Market participants have been closely monitoring inflation data to predict when the U.S. Federal Reserve might start reducing interest rates, which is often thought to benefit longer-term portfolios that are more risk-tolerant.

According to the CME Group FedWatch Tool, traders currently see a 59.5% chance of a rate cut by the central bank at September's Federal Open Market Committee (FOMC) meeting.

The U.S. Federal Reserve targets a 2% inflation rate and began raising interest rates in March 2022. The Fed last increased rates in July 2023 and has since maintained them at the benchmark overnight borrowing level range of 5.25%-5.50%, the highest in approximately 23 years.

Uncertainty pervades bitcoin and wider crypto market 

According to Bitfinex analysts, bitcoin and the wider cryptocurrency market have been exhibiting a mix of uncertainty and volatility since Wednesday's presidential election debate between Donald Trump and Joe Biden.

"Following the first debate between Donald Trump and Joe Biden, markets exhibited a mix of uncertainty and volatility, as investors digested the debate's implications," Bitfinex analysts told The Block.

They added that many crypto investors clearly favored the performance of Donald Trump, who has recently embraced the crypt0 industry. "Memecoins like TRUMP and MAGA, based on the Republican campaign slogan, went up 11% and 16% on the day respectively, several other memecoins related to Donald Trump moved up at least momentarily shortly after the debate," the analysts added.