A closely watched US services-sector price gauge climbed to 74.0 in September, its highest level since July 2022, even as the sector's overall growth slowed. Fed Vice Chair Philip Jefferson had already flagged upside inflation risks days earlier, and together the two leave Bitcoin's rate-relief outlook uncertain rather than clearly improving.
The Institute for Supply Management's services prices index rose to 74.0 in September, up from 72.6 in August and its highest reading since July 2022, when it hit 74.5. The gauge was released October 5 and measures how widely survey respondents report rising input costs, not the size of those increases, so it cannot be read as a consumer-inflation rate.
Services growth slows as cost pressure spreads
The headline services PMI eased to 54.9 from 55.4. Business activity dropped to 56.5 from 61.7, with both figures staying above the 50-point expansion threshold. Employment, however, rose from 47.8 to 50.1, returning to slight growth after two months of contraction. Growth lost momentum, therefore, even as reported cost pressure became more widespread.
Jefferson flags upside inflation risk
Fed Vice Chair Philip Jefferson said on October 1 that inflation risks tilted upward. He also described September's quarter-point increase in the federal funds target range to 3.75%-4.00% and said future adjustments should depend on the data, outlook and balance of risks. His remarks preceded the services release, adding cost-pressure evidence to a policy debate already underway. As a result, slower growth gives investors only part of the picture, while rising input costs keep the prospect of rate relief uncertain.
Bitcoin traded near $85,580 on October 6, down 0.04% over 24 hours, a rolling change that cannot identify any reaction to the ISM release.
Bitcoin's financing channel runs on its own rails
For leveraged Bitcoin exposure, the concern is how this uncertainty affects financing and risk appetite. If persistent costs make rate relief less likely and investors turn more cautious, financing-sensitive positions could face pressure, since leverage magnifies losses from an adverse price move. The Fed's policy rate and perpetual-futures funding operate differently, however: Bitcoin funding needs its own market observation and cannot be inferred from the federal funds target. A February 2023 New York Fed study using intraday data found Bitcoin largely disconnected from monetary and macroeconomic news in its sample.
The funding-risk case would strengthen if adverse policy or yield repricing coincided with weaker leveraged demand. Easing cost pressure, stable rate expectations or stronger buying without leverage would weaken it instead. Slower services growth alone offers little assurance of relief for leveraged Bitcoin positions; its effect on financing still needs evidence from the markets.
Source: CryptoSlate
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