I’m not very optimistic about BTC in the short term based on this ISM data.
The U.S. services PMI rose to 54.1 in July.
On the surface:
The economy still looks pretty strong.
But two numbers inside matter more:
The price index surged to 70.3,
while employment fell to 47.4.
In plain terms, things are getting more expensive, but companies are increasingly unwilling to hire.
This is actually very uncomfortable for the Federal Reserve.
The economy isn’t weak enough that it has to be rescued right away,
and inflation isn’t low enough that it’s safe to cut rates.
This is exactly the kind of situation BTC dislikes:
Liquidity can’t be released,
and the economy is starting to show cracks again.
So for now, I won’t treat “weaker employment” as a clear positive.
The real comfortable scenario would be:
Employment cools gradually,
and inflation cools along with it.
Not this one—
people are being hired less,
but prices are still rising.
Next, I’ll only watch Friday’s nonfarm payrolls.
If employment continues to weaken significantly, and U.S. Treasury yields fall,
I’ll turn more bullish.
If employment isn’t bad and inflation pressure remains high,
then the Fed still has reasons to stay hawkish.
In one sentence:
The biggest problem with the U.S. economy right now isn’t that it’s too strong or too weak.
It’s that it has a bit of stagflation flavor.
$BTC $ETH #ISM #美国ISM服务业指数升至54.1
The U.S. services PMI rose to 54.1 in July.
On the surface:
The economy still looks pretty strong.
But two numbers inside matter more:
The price index surged to 70.3,
while employment fell to 47.4.
In plain terms, things are getting more expensive, but companies are increasingly unwilling to hire.
This is actually very uncomfortable for the Federal Reserve.
The economy isn’t weak enough that it has to be rescued right away,
and inflation isn’t low enough that it’s safe to cut rates.
This is exactly the kind of situation BTC dislikes:
Liquidity can’t be released,
and the economy is starting to show cracks again.
So for now, I won’t treat “weaker employment” as a clear positive.
The real comfortable scenario would be:
Employment cools gradually,
and inflation cools along with it.
Not this one—
people are being hired less,
but prices are still rising.
Next, I’ll only watch Friday’s nonfarm payrolls.
If employment continues to weaken significantly, and U.S. Treasury yields fall,
I’ll turn more bullish.
If employment isn’t bad and inflation pressure remains high,
then the Fed still has reasons to stay hawkish.
In one sentence:
The biggest problem with the U.S. economy right now isn’t that it’s too strong or too weak.
It’s that it has a bit of stagflation flavor.
$BTC $ETH #ISM #美国ISM服务业指数升至54.1