The US government's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, has shown a slowdown in price increases. The headline PCE inflation rate dropped to 2.6% from 2.7%, while the core PCE inflation also declined to 2.6% from 2.8%. This suggests that the high inflation that has plagued the US economy may be starting to ease.

The cooling inflation data has raised expectations of a potential interest rate cut by the Federal Reserve in September. Wall Street analysts at major banks like JPMorgan, Goldman Sachs, and Morgan Stanley now anticipate the Fed to start cutting rates later this year as inflation cools.

This news has had a positive impact on the cryptocurrency market. Bitcoin and other major altcoins like Ethereum, Solana, and XRP, which had recently experienced a selloff, are now showing signs of recovery. Analysts believe that the cooling inflation and potential rate cuts could provide a boost to the crypto market in the coming weeks.

However, Bitcoin is still consolidating within a "bull flag" pattern, and traders are waiting for a decisive break above the pattern's top to confirm a bullish breakout. Meanwhile, the US dollar index has dropped slightly, and the 10-year Treasury yield has also declined following the PCE data release.

Overall, the slowdown in the Fed's preferred inflation gauge is being seen as a positive development for the crypto market, with the potential for a rally in Bitcoin and altcoins if the trend continues and the central bank acts accordingly.