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PCE Inflation, Fed Showdown, and Bitcoin’s Drop — Today’s 3 Big Money Stories (Aug 29, 2025)

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The markets are entering the final stretch of August with heightened anticipation. From inflation data that could shape Fed policy, to a rare legal fight over central bank independence, and the sudden drop in Bitcoin, today’s financial headlines pack a punch.

Here’s what you need to know.

  1. PCE Inflation Print: All Eyes on the Fed

Markets are bracing for the Personal Consumption Expenditures (PCE) inflation report, one of the Federal Reserve’s preferred measures of inflation.

  • Why it matters: A cooler reading could cement expectations for a September rate cut, even if it’s modest.
  • Key context: Fed Governor Christopher Waller hinted recently that cuts may begin soon, fueling market whispers.
  • Market moves: Futures softened ahead of the release, with traders cautious during “amateur hour” at the open, when market makers can take advantage of retail investors.

If inflation comes in soft, risk assets could get a boost. A hot number, however, may trigger volatility.

  1. Fed Independence Showdown

The fight over the Federal Reserve’s independence is intensifying.

  • Background: President Trump fired Fed Governor Lisa Cook, but she has sued to block the move. A court hearing in Washington, D.C. is set for today.
  • Why it matters: This clash could reshape the Fed’s balance of power, with ripple effects on interest rates, the U.S. dollar, and global markets.
  • Bigger picture: Trump has hinted at firing Chairman Jerome Powell as well, creating further uncertainty. Powell is now walking a political tightrope—support Cook and risk Trump’s wrath, or comply and risk credibility.

This rare political-legal showdown could redefine how independent the Fed truly is.

  1. Bitcoin Slips Below $110K

Bitcoin briefly dipped under $110,000 before rebounding, reflecting pressure ahead of the PCE release.

  • Recent performance: BTC hit August highs above $120,000 but has since cooled.
  • Drivers:
    • Waning optimism on rate cuts
    • Heavy whale flows shaking up order books
    • General risk-off mood ahead of macro signals
  • Crypto landscape: Ethereum, XRP, and other altcoins are seeing interest, but Bitcoin remains choppy. Meanwhile, corporate treasuries continue adding BTC, raising long-term demand questions.

The puzzle remains: Why is Bitcoin softening just as institutional adoption rises? Traders are watching closely.

Life-Improving Investor Tips

  1. Stay Disciplined During Volatility
    Don’t get caught in “amateur hour” swings. Wait for the market to settle before making big moves.
  2. Diversify Against Political Risk
    The Fed showdown highlights how politics affect markets. Diversification—across assets and geographies—reduces exposure.
  3. Crypto Allocation = Risk Allocation
    Bitcoin’s dip shows how volatile crypto can be. Limit exposure to what you can afford to lose.
  4. Focus on Cash Flow Strategies
    Instead of chasing hype, build income streams through proven tools like covered calls.

FAQs

Q: Why is the PCE report so important?
A: It’s the Fed’s preferred inflation gauge. A soft number strengthens the case for a rate cut, which impacts stocks, bonds, and crypto.

Q: What does the Fed showdown mean for me?
A: Political pressure on the Fed creates market uncertainty. Expect heightened volatility in bonds, gold, and the U.S. dollar.

Q: Should I buy Bitcoin after the dip?
A: That depends on your risk tolerance. Long-term demand remains, but near-term volatility is high. Consider dollar-cost averaging if you’re bullish.

Call to Action

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Conclusion

Today’s top three money stories—PCE inflation, the Fed’s independence fight, and Bitcoin’s decline—underscore how interconnected politics, data, and investor psychology really are.

The lesson? Markets are unpredictable, but your strategy doesn’t have to be. By focusing on risk management, disciplined income approaches, and diversification, you can navigate uncertainty with clarity and confidence.

In investing, it’s not about predicting every headline—it’s about preparing for every outcome.