- The recent announcement of the U.S. PMI data has the potential to influence FED’s upcoming interest rate decisions.
- While Manufacturing PMI exceeded expectations, Service PMI fell short, making the market’s reaction neutral.
- FED Chairman Jerome Powell hints at possible rate hikes in the coming months.
In-depth analysis on the recently revealed U.S. PMI data and its potential impact on FED’s future interest rate policies.
Unexpected Turns in U.S. PMI Data
The recently announced U.S. PMI data showcased a mixed bag of outcomes. Manufacturing PMI for September came in at 48.9, above the market expectations of 48.0. On the other hand, the Services PMI was announced at 50.2, falling short of the expected 50.6. This divergent data is likely to add complexity to FED’s future decisions regarding interest rates.
FED Maintains Status Quo on Interest Rates
Despite growing concerns over inflation, the FED decided to keep policy interest rates unchanged in its most recent meeting. The decision was widely expected, but it nevertheless was the focal point of market attention. The absence of a surprise rate hike aligns with FED’s ongoing cautious approach, especially given the over-target inflation figures.
FED Chairman Jerome Powell’s Future Outlook
FED Chairman Jerome Powell, in his press briefing following the interest rate announcement, acknowledged the existing high inflation levels. He indicated that although the inflation rate has slowed down somewhat, it still significantly overshoots the 2% target. Powell asserted that if necessary, they would continue to increase interest rates to combat inflation.
Bitcoin Market Reacts
With a live price of $26,590.27 USD and a 24-hour trading volume of $11,281,291,844 USD, Bitcoin seemed to remain unaffected by the FED’s announcement and the subsequent PMI data release. Bitcoin is up by 0.60% in the last 24 hours, maintaining its position as the top cryptocurrency. This could signify that cryptocurrency markets are yet to react substantially to macroeconomic indicators and central bank decisions.
Conclusion
The latest U.S. PMI data, coupled with FED Chairman Jerome Powell’s comments, suggest that future interest rate hikes are a real possibility. While Manufacturing PMI data exceeded expectations, Service PMI didn’t meet the market’s predictions, thus making the overall market reaction neutral. In such a nuanced economic environment, investors and traders must keep a close eye on further data releases and FED announcements to make informed decisions.
