We are closely monitoring the effects of tariffs on the U.S. economy since the Fed’s monetary policy will adjust accordingly. Today’s preliminary U.S. PMI data provides important insights into production and the broader economy. As this piece was being prepared, Trump made statements regarding his tensions with Elon Musk.
The U.S. Economic Data Impact
The rift between Elon Musk and Trump widened long ago. Following the acceptance of the tax law this month, Trump openly criticized Musk, claiming, “I will eliminate the advantages given by the government to his companies; thus, the budget deficit will decrease.” However, Trump’s stance has now shifted entirely.
“Everyone says I will destroy Elon’s companies by cutting the large subsidies they receive from the U.S. government. This is not true! I want Elon’s, and all businesses in our country, to thrive, even more than ever before!”
Yesterday, the White House confirmed that Trump’s name was in the Epstein case files. Rather than deny it, Trump seems poised to confront this reality and forge ahead. As for the PMI data, the situation is as follows:
- U.S. Services PMI Reported: 55.2 (Expectation: 53 Previous: 52.9)
- U.S. Manufacturing PMI Reported: 49.5 (Expectation: 52.7 Previous: 52.9)
- U.S. Composite PMI Reported: 54.6 (Expectation: 52.8 Previous: 52.9)
The preliminary report points to a contraction in the manufacturing sector. The figures, which are below expectations compared to the previous month, present a negative outlook for the economy. The Services PMI is robust; however, these are preliminary data and may undergo substantial revisions.
The Kripto Currency Landscape
According to Williamson, S&P’s Chief Economist:
“Preliminary PMI data revealed a sharp rise in the U.S. economy at the start of the third quarter, aligning with an annual growth rate of 2.3%. This signifies a marked improvement compared to the 1.3% growth rate anticipated in the second quarter survey.
The sustainability of this growth is by no means certain. The growth was alarmingly unbalanced and overly dependent on the services sector, as manufacturing sector conditions worsened for the first time this year. This was linked to the diminishing effects of tariff measures.”
The current outlook for cryptocurrencies is not excellent but not as dreadful as feared. U.S. Manufacturing PMI Reported: 49.5 (Expectation: 52.7).
