Friday’s devastating jobs report hammered crypto, but that’s not the whole story. A stealthier threat is emerging: the ISM Services PMI. This key indicator is flashing warning signs, painting a surprisingly weak picture of economic activity and suggesting the crypto plunge might be more than just a blip.
The economic pulse of the services sector weakened in July, with the ISM Services Index registering a tepid 50.1. This figure significantly trails expectations of 51.5, painting a less optimistic picture of growth. While a number above 50 technically signals expansion, this nearstall suggests the services engine is sputtering, highlighting potential vulnerabilities in the broader economy. A fall below 50 would indicate contraction, raising further concerns.
The latest print whispers unease: a three-month downtrend hinting at deeper economic currents. May’s near-contraction at 49.9 and June’s tepid 50.8 paint a starkly different picture compared to the robust growth of previous months – a slowdown that demands attention.
ISM Services PMI (ISM)
The economic report flashed a double warning: not only was growth sputtering, but inflation was roaring. The Prices Paid subindex didn’t just inch up; it rocketed to a cycle peak of 69.9, a stagflation siren screaming at full blast.
“Tariffs aren’t just a line item; they’re a wrecking ball. One report revealed the stark reality: ‘We’re hemorrhaging funds on equipment and supplies thanks to these tariffs. The hit is so severe, we’re shelving critical projects just to stay afloat.'”
Neither crypto nor traditional markets took kindly to the Tuesday data, with bitcoin
BTC
$113,092.75
Fed cut now?
Yesterday’s high of $114,000 proved fleeting as Bitcoin retraced, dipping nearly 2% to $112,800. Similarly, Nasdaq’s initial climb fizzled, ending the day down 0.5% after a disappointing reversal.
Economist Mark Zandi, reeling from Friday’s massive jobs data revisions, put it bluntly: “Economic turning points, like recessions, always trigger a data demolition derby.”
“The economic ground is cracking beneath our feet,” he warned, his voice a low rumble. “The lifeblood of consumer spending has stagnated, while construction and manufacturing are in freefall. The job market, once a beacon of hope, is about to crumble. Trapped between runaway inflation and a crippled ability to respond, the Federal Reserve is running out of options as the recession looms.”
Forget what you think you know about the Fed’s patience. Investment gurus Lacy Hunt and Van Hoisington of Hoisington Investment Management are raising a red flag. They argue that rising prices from tariffs are merely a fleeting first act. The real drama, according to Hunt and Hoisington, lies in the looming contractionary sequels, a financial horror show the Fed seems determined to ignore.
“The central bank is playing with fire. An aggressive pivot towards easing is not just advisable, it’s a necessity. Hesitation is a dangerous gamble. The real threat looming on the horizon? A chilling contraction of global economic forces.”
Thanks for reading Does the Fed Need to Cut Now? Bitcoin Crumbles Back Below $113000 After ISM Services PMI
