Despite a surge to $85,000 following Federal Reserve announcements, Bitcoin (BTC) 
$90,533 is still not secure as its price retreated to $83,000 after the U.S. data release. Liquidations in cryptocurrencies exceeded $2 billion, highlighting market turbulence. What insights do today’s U.S. data provide?
Michigan Sentiment Report Insights
As the Federal Reserve approaches its December 10th interest rate decision, it will lack several crucial reports. This absence has fueled expectations of steady interest rates, disrupted by Lisa Cook’s recent unsettling remarks. Consequently, Michigan and other minor reports have gained significance. The latest Michigan Sentiment report was released today.
The sentiment index was forecasted at 50.6 but reported at 51, surpassing last month’s 50.3. Despite this, consumer confidence remains significantly below 2024’s 71.8. Economic condition expectations declined from 58.6 last month to 51.1 this month, underperforming last year’s 63.9. This indicates a weakened economic outlook. However, consumer expectations slightly rebounded to 51 from last month’s 50.3, albeit still lower than last year’s 76.9.
The next data release is due on December 5th, ahead of the Fed meeting. Joanne Hsu, Director of Consumer Surveys, remarked on the marginal 2.6-point decline in consumer confidence from October, noting it remains within the error margin. While some confidence recovered post-federal government shutdown, consumers remain disenchanted due to persistent high prices and weakened incomes. Despite over a 10% drop in current personal finances and durable goods purchasing conditions, future expectations improved slightly. The month ended with stockholder confidence declining about two index points from October, likely due to recent stock market downturns.
Inflation expectations have improved, dropping from 4.6% in the previous month to 4.5% this month, marking a three-month decline. Yet short-term expectations still surpass January’s 3.3%. Long-term expectations dipped from last month’s 3.9% to 3.4%, slightly above January 2025’s 3.2%. Despite these improvements, consumers report ongoing pressure on personal finances due to high costs.
The improvement in inflation expectations is promising. However, recent announcements by Trump concerning Russian oil sanctions led BTC to dip below $83,000.
U.S. PMI Data Analysis
Purchasing Managers’ Index (PMI) data are crucial for assessing the economy’s production and growth, especially for the upcoming Fed meeting. Preliminary PMI data released today require cautious interpretation due to a high deviation probability, despite offering insights into the finalized PMI figures.
- U.S. S&P Services PMI Preliminary Index Reported: 55 (Forecast: 54.6 Previous: 54.8)
- U.S. S&P Manufacturing PMI Preliminary Index Reported: 51.9 (Forecast: 52 Previous: 52.5)
Chief Economist Chris Williamson from S&P Global Market Intelligence asserts the current situation mirrors relative buoyancy in the U.S. economy, supporting a 0.5% GDP. For now, hopeful expectations arise from robust production growth in both manufacturing and broader services, encouraging broad-based optimism. Rising business confidence regarding next year’s prospects further contributes to positive sentiments. Prospects of reduced interest rates and the end of government shutdowns have bolstered economic optimism while alleviating political concerns.
Nonetheless, manufacturers report a troubling alignment of slowing new order growth and record inventory increases. Accumulation of unsold stocks suggests a potential slowdown in factory production unless demand rekindles, potentially slowing growth in many service sectors. Moreover, while employment continues to rise in November, tariff-related cost concerns keep employment rates constrained. Both input costs and sales prices have escalated, worrying inflation hawks.
The PMI data stands supportive of potential interest rate cuts.
