Softer PCE Inflation Fails to Ease Global Liquidity Pressure | Bitunix Market Update

July 31, 2026 — Softer U.S. inflation data initially strengthened expectations for a more accommodative Federal Reserve, but markets have been reluctant to fully price in a dovish shift. While inflation pressures have moderated, resilient private demand, AI-driven investment, and continued policy caution from global central banks suggest that the real driver of asset prices remains the evolution of global liquidity conditions and capital costs.

Softer PCE Inflation Does Not Change the Global Liquidity Outlook

The latest U.S. June PCE inflation data came in below expectations, with headline PCE recording negative monthly growth and core PCE increasing only 0.1% month-over-month.

Annualized GDP growth also showed signs of moderation, seemingly supporting the argument that inflation is cooling and economic activity is slowing.

However, a deeper look at the economic composition suggests a more complex picture.

Private final demand, consumer spending, and AI-related business investment remained resilient, indicating that underlying economic momentum has not significantly weakened.

This explains why markets have not fully shifted toward a dovish policy outlook. Instead, investors are increasingly focused on:

• Central bank credibility

• Global liquidity conditions

• The future path of capital costs

The key question is no longer simply whether inflation is falling, but whether financial conditions can meaningfully loosen while economic activity remains resilient.

Global Central Banks Maintain Restrictive Policy Signals

The global monetary policy environment remains cautious despite softer U.S. inflation.

Japan is widely believed to have coordinated with the United States on foreign exchange intervention, while South Korea was also reported to have sold U.S. dollars to support currency stability.

Although the Bank of Japan kept interest rates unchanged, several policymakers continued supporting future rate increases.

Meanwhile, three members of the Bank of England also voted in favor of a rate hike, showing that major central banks remain focused on managing inflation risks and currency pressures.

The broader market implication is that liquidity conditions are tightening through multiple channels:

• Interest-rate expectations

• Foreign exchange intervention

• Central bank communication strategies

As a result, softer U.S. inflation alone has not been enough to reverse the broader restrictive financial environment.

AI Investment Supports Technology Fundamentals but Creates Market Divergence

Technology fundamentals remain relatively strong, particularly in areas linked to artificial intelligence infrastructure.

Amazon's AWS revenue exceeded expectations, Oracle continued expanding its partnership with Google, and OpenAI reduced model pricing again, suggesting that the AI sector is moving beyond pure model competition toward:

• Cost efficiency

• Enterprise adoption

• Scalable AI deployment

However, performance across technology companies remains uneven.

Apple's weaker results in China and its services business highlight that consumer-focused technology demand remains more fragile compared with companies benefiting directly from AI infrastructure spending.

This divergence may continue widening the valuation gap between:

• AI infrastructure beneficiaries with strong growth momentum

• Consumer hardware companies facing demand uncertainty

Global Liquidity and AI Growth Create a Market Balancing Act

Looking ahead, markets are becoming less focused on whether the Federal Reserve will simply cut or raise interest rates.

Instead, investors are watching whether global central banks continue maintaining restrictive financial conditions through:

• Policy rates

• Currency market intervention

• Strategic communication

If expectations for further Bank of Japan tightening continue increasing and Asian central banks remain active in foreign exchange markets, global carry trades and U.S. dollar liquidity could continue adjusting.

At the same time, AI investment and corporate earnings remain important supports for risk assets.

The market is therefore facing a continued balance between:

• Tightening global liquidity conditions

• Resilient AI-driven corporate fundamentals

This tension is likely to keep volatility elevated throughout the third quarter.

Crypto Market Outlook: Liquidity Conditions Remain the Key Variable

For cryptocurrency markets, softer inflation data provides some support but does not remove broader liquidity challenges.

Digital assets remain influenced by:

• Federal Reserve policy expectations

• Global dollar liquidity

• Treasury and currency market movements

• Risk appetite across financial markets

While AI-related growth and corporate resilience may continue supporting broader risk sentiment, persistent global monetary tightening could limit upside momentum for high-volatility assets.