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BTC Slips Despite Cooling US Economic Data Ahead Of FOMC – Crypto News

Published

1 year ago

May 1, 2024

Dripp

The crypto market is eagerly waiting for the FOMC decision by the Federal Reserve on their policy rates, which is scheduled for later today. However, amid this, the investors were also eagerly waiting for the ISM Manufacturing PMI and Job openings data for cues on the current condition of the economy.

Meanwhile, according to recent data, PMI Manufacturing was at 49.2% in April, down from the market estimates. Simultaneously, the job openings data also painted a gloomy picture, while dampening the investors’ confidence and suggesting a further delay in the Fed rate cut plans.

Economic Data Hints At Potential Delay In Fed’s Rate Cut Plans

The recent Manufacturing PMI data, released by the Institute for Supply Management (ISM), showed that in April, the PMI soared 49.2%, as compared to the market expectation of 49.9% and the previous surge of 50.3%. Notably, the Purchasing Managers’ Index (PMI) serves as a crucial indicator, ranging from 0 to 100. The indicator is closely watched by the Fed officials as well as the investors to understand the economic condition of the nation.

Meanwhile, a PMI exceeding 50 signifies economic expansion compared to the previous month, while below 50 indicates contraction. Simultaneously, a reading of 50 suggests stability or no change in the economic condition.

Notably, the deviation from 50 signifies the extent of change, with higher deviations signifying more substantial shifts in economic activity. Considering the importance of the metric and the Fed’s interest in it, understanding PMI is vital for assessing the health of sectors and making informed business decisions amidst evolving market conditions.

On the other hand, the labor market data showed that the March Job Openings in the U.S. were at 8.5 million, as compared to a market expectation of 8.7 million and 8.8 million in the prior month. Although the numbers showed a slight decline from the prior month, the data still indicates that the job market remained hot, which also triggers concern over a potential delay in the Federal Reserve’s rate cut plans.

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What’s Next?

The Federal Reserve is expected to unveil its decision on the interest rate later today. Investors are eagerly waiting for the FOMC decision later today, which might shed light on the potential stance of the central bank with their policy rate plans.

However, the recent gloomy economic data has already weighed on the investors’ sentiment so far, suggesting a potential delay in the Fed’s rate cut plans. For instance, the first quarter of U.S. GDP came in lower than the market expectation, suggesting that the higher inflation has continued to dampen the economic growth. In addition, the PCE inflation data also came in higher than the 2% target range of the Fed, impacting the market confidence.

Meanwhile, the cryptocurrency market has witnessed a sharp decline today, as investors have shifted their focus toward the FOMC decision. Notably, it appears that the market participants are staying on the sideline for more clarity on the U.S. economy and the Fed’s potential move before making further bets into the market.

Meanwhile, following the release, the Bitcoin price declined 5.70% and traded at $57,175.29. Notably, the crypto has touched a low of $56,555.29 in the last 24 hours, reflecting the heavy selling pressure in the digital asset space.

Also Read: Why Bitcoin Price Dropped Today? When Will It Recover?