US PCE just released: The real headache isn’t 3.7%, it’s that 'spending is stalling, but inflation hasn’t come down yet.' July US PCE year-over-year rose to 3.7%, higher than market expectations; core PCE remains as high as 3.3%. After the data came out, the market’s pricing for a Fed rate hike in September jumped directly from about 36% to 42%. However, actual consumer spending in July was almost flat month-over-month. In other words, the US is now facing a combination that risk assets hate the most—spending is starting to stall, but inflation is still stuck above 3%. For $BTC, US stocks, and crypto, the next thing to watch is whether US Treasury yields and the dollar will continue to climb. If the rate market pushes the probability of a September rate hike above 50%, and Nvidia’s earnings report tonight slightly misses expectations, that would be the real nightmare scenario for risk assets.