September's ISM manufacturing prices index jumped to 77.9 from August's 71.1, while factory activity, new orders, and employment all stayed in expansion. New York Fed President John Williams said another rate increase could be appropriate late this year if the economy follows his forecast, raising the stakes for Bitcoin ahead of Friday's jobs report.
US manufacturers reported wider input-price increases in September, with the Institute for Supply Management's prices index climbing to 77.9, up 6.8 points from August's 71.1. The reading adds a potential financing risk for Bitcoin if investors respond by pricing in higher interest rates ahead of Friday's jobs report.
The gauge measures how widely companies reported monthly increases, not an outright inflation rate. 58.6% of respondents cited higher input prices, compared with 46.2% in August. The manufacturing PMI registered 54.5, with new orders at 55.3 and employment at 52.7, signaling factory activity stayed in expansion.
Rate expectations tied to Bitcoin's financing costs
The policy backdrop already includes a quarter-point move: the Federal Open Market Committee raised its target range to 3.75% to 4% on Sept. 16. New York Fed President John Williams said Sept. 29 that another rate increase might be appropriate late this year if the economy broadly follows his forecast, though he added there's no evidence yet of the price shocks spilling into broader, persistent inflation.
Those dynamics could affect Bitcoin two ways: more expensive borrowing that makes financed risk-taking less attractive, and higher returns on interest-bearing dollar assets that compete for the same capital, per the Fed's policy transmission framework.
Bitcoin is up 1.10% over the past 24 hours, with its market cap near $1.7 trillion. Its 24-hour volume sits at $33.31 billion, down 7.43%.
Friday's jobs report is the next test
The Bureau of Labor Statistics has scheduled September's Employment Situation report for Oct. 2, and the ISM's manufacturing employment reading alone cannot substitute for the national payroll figures. If that report strengthens expectations for higher rates, financing costs and competing dollar returns could become a firmer headwind for Bitcoin.
But if front-end Treasury yields or rate expectations ease instead, that transmission weakens. A February 2023 New York Fed study found no systematic Bitcoin response to monetary and macroeconomic news in its historical intraday sample, underscoring that a factory-cost reading alone doesn't guarantee a selloff.
Source: CryptoSlate
Trading involves risk.
Risk Disclaimer
