The US Economy Has Suddenly “Exploded”
Recently, an interesting phenomenon has appeared in the market:
The stronger the US economic data, the more tense risk assets become.
The September US composite PMI preliminary value rose to 58.4, clearly exceeding August's 56.0, and it is the highest level since July 2021.
A PMI above 50 indicates that economic activity is in an expansion state.
This time, not only the service industry is growing, but the manufacturing sector is also performing strongly.
More importantly, the new orders index rose from 55.2 to 58.2, reaching the highest level since March 2022.
Simply put:
US companies are not just “doing well,” but orders are significantly increasing, and business activity is noticeably accelerating.
If we only look at economic growth, this is indeed a very impressive set of data.
But the problem lies precisely here.
Why Does a Strong Economy Make the Market Worried?
Because what the market fears the most now is not a recession in the US economy.
But rather:
A too strong economy that keeps inflation high.
There is one particularly noteworthy statistic in this PMI— the enterprise input price index.
This index rose from 59.9 in August to 66.4 in September, reaching the highest level since October 2022.
At the same time, the backlog of orders increased significantly, and the supply chain delivery times were further prolonged.
What does this mean?
Demand is growing, but business costs are also rising rapidly.
When demand is strong and costs are rising, businesses are more likely to pass on costs to consumers.
This could ultimately form new inflationary pressure.
So what the market is truly worried about regarding this PMI is not that “the US economy is too good.”
But rather:
With such a strong US economy, does the Federal Reserve still have any reason to cut interest rates?
📌 If you want to continuously track BTC, ETH, and the impact of macro data on the market, you can follow the public account "Crypto Lao Ding," which clarifies important market changes and the logic behind them every day.
The Most Awkward Position for the Federal Reserve Right Now
This question is even more sensitive in the current macro environment.
Just last week, the Federal Reserve raised the benchmark interest rate by 25 basis points, bringing the rate range to 3.75%—4.00%.
The PMI data also shows that US economic activity remains very strong, with price pressures rising again.
This means:
If inflation continues to stay high, the Federal Reserve may find it difficult to quickly shift to easing.
There’s even the possibility of continuing to raise interest rates.
So the market has started to reprice the future path of interest rates.
After the data was released, US Treasury yields rose further, with the 10-year Treasury yield back above 5%; the US dollar index also broke 101.
This is why:
A set of seemingly positive US economic data may ultimately become pressure on risk assets.
What Does This Have to Do with Bitcoin (BTC)?
Many people see the PMI and might first react:
“The US economy is so strong; the stock market should rise, and BTC should rise too, right?”
But BTC today cannot be assessed solely based on economic growth.
What is more important is:
Liquidity.
The logic is quite simple:
Strong US economy
→ Strong demand
→ Increased inflation pressure
→ Limited space for Federal Reserve rate cuts
→ Even possible continued rate hikes
→ Strengthened Treasury yields and dollar
→ Global liquidity under pressure
→ Increased pressure on risk assets.
BTC is also within this chain.
So what is truly worth paying attention to is not:
“How good is the US economy really?”
But rather:
“Will a strong US economy lead the Federal Reserve to become more hawkish?”
This is the real connection between the PMI and BTC.
📌 If you want to continuously track BTC, ETH, and the impact of macro data on the market, you can follow the public account "Crypto Lao Ding," which clarifies important market changes and the logic behind them every day.
What Is Different This Time Compared to Regular PMI Data?
Because the current macro environment itself is quite special.
On one hand, US economic activity has clearly accelerated.
On the other hand, supply chains are still constrained, and input costs for businesses have significantly increased.
According to reports from Jinshi, citing a survey from S&P Global, the occurrence of supply chain delays has reached the most widespread level since July 2022; at the same time, conflicts in the Middle East are also affecting supply.
This means that this inflation pressure does not solely originate from demand.
Strong demand + constrained supply + rising energy and transportation costs may make inflation more stubborn.
This is also one of the reasons the market is beginning to worry about the Federal Reserve continuing to tighten policies.
What Should Really Be Focused On for BTC?
So do not simply interpret it as:
“PMI rises, BTC is going to drop.”
Macro data has never been such a simple one-to-one relationship.
What is really important is what changes in market expectations have occurred.
If the US economy continues to remain strong and inflation continues to rise, the market may further increase expectations for Federal Reserve rate hikes.
This would not be friendly to the liquidity environment for BTC.
But if subsequent data shows that inflation is just a temporary rebound and economic activity cools down again, then market worries about rates may also ease.
So what we should really watch next are three variables:
Inflation, interest rates, liquidity.
The PMI is just one signal among them.
📌Mr. Web3 X: A Strong Economy Makes BTC Face New Macro Pressures
The biggest significance of this US PMI is not to tell us how strong the US economy is.
But rather to remind the market:
The Federal Reserve may not be ending tightening that quickly.
As the US economy continues to expand and business costs continue to rise, the market will reconsider a question:
Is a rate of 3.75%—4.00% really high enough?
For BTC, what is actually worth paying attention to is not just a single PMI data.
But whether inflation, employment, and Federal Reserve policies will collectively push expectations for interest rates to continue rising.
A strong economy does not necessarily mean bad news for BTC, but if “strong economy” ultimately translates into “higher rates and tighter liquidity,” that is what truly needs to be vigilant about.
—— I am Mr. Web3 X, growing in Web3 for 6 years, focusing on Bitcoin, the crypto market, macroeconomics, and industry trends. If you want to continuously track BTC, ETH, HYPE, and the impact of macro data on the market, you can follow the public account "Crypto Lao Ding." Understand the hotspots, gain insight into the logic, and build your own judgments instead of just fixating on price fluctuations.
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