US Services Prices Hit Four-Year High Clouding Bitcoin Financing Outlook
The US services prices gauge climbed to a four-year high in September, reaching 74.0, up from 72.6 in August. This surge came despite a slight slowdown in other economic indicators. The services PMI dipped to 54.9 from 55.4, while business activity fell to 56.5 from 61.7. Employment showed a modest recovery, rising to 50.1 from 47.8, ending two months of contraction.
The Federal Reserve raised its target funds rate to 3.75%-4.00% after a September hike. Rising input costs, as indicated by the ISM services report, suggest that financing may remain expensive for leveraged Bitcoin holders and other crypto margin players. This could increase risks in crypto and DeFi markets, particularly for funding and perpetual-market activities.
Fed Vice Chair Philip Jefferson noted on October 1 that inflation risks are tilted upward. He emphasized that future rate adjustments will depend on data, outlook, and balance of risks. The latest ISM report adds to the debate, showing that slower growth is accompanied by rising input costs, making rate relief uncertain.
For leveraged Bitcoin positions, the uncertainty over financing conditions could create pressure. Historical data suggests that Bitcoin's price is not automatically linked to monetary or macroeconomic news. On October 6, Bitcoin traded near $85,580, down 0.04% over 24 hours, though this change cannot be directly attributed to the ISM release.