Bitcoin falls below $113,000 - Following lower-than-expected ISM Non-Manufacturing PMI | CoinDesk JAPAN

• The non-manufacturing PMI (Purchasing Managers' Index) released by ISM (Institute for Supply Management) on August 5 not only fell short of expectations but also showed signs of stagflation.
• This is the latest data indicating that the economy is weaker than expected.
• In light of this result, discussions have begun on how quickly the Federal Reserve Board (FRB) will move to cut interest rates.

The shocking downward revision of the employment statistics announced on August 1 (which caused cryptocurrency prices to plummet) has been accompanied by the ISM Non-Manufacturing PMI, which has consistently begun to indicate that economic activity is softening more than expected.

The ISM Non-Manufacturing PMI for July was 50.1, significantly below the expected 51.5. This index indicates economic expansion when above 50 and contraction when below.

This soft result is noteworthy as May was 49.9 and June was 50.8, indicating a weakness that has continued for three consecutive months. This represents a significant slowdown compared to previous months.

ISM Non-Manufacturing PMI (ISM) In addition to signs of weakness in this economy, the report also included signs of stagflation. This is due to the surge in the Purchasing Price Index, which rose sharply to a cycle-high of 69.9.

A comment mentioned in the ISM report stated, "As we continue to purchase equipment and supplies, tariffs are causing additional costs... These costs are significant, and we are postponing other projects to accommodate these cost changes."

The data announced on the 5th did not elicit a positive response from either the cryptocurrency market or the traditional market. Bitcoin (BTC) fell from over 114,000 Dollars to 112,800 Dollars, decreasing by nearly 2% in the past 24 hours. The Nasdaq lost its previous gains and turned down by 0.5%.

Will the FRB cut rates right now?

Economist Mark Zandi stated that after the significant downward revision of the employment statistics for the day, "When the economy is at a turning point, such as in a recession, the data is always significantly revised."

Mr. Zandi further stated, "The economy is on the brink of recession. Consumer spending has stagnated, the construction and manufacturing sectors are contracting, and employment will decrease. With inflation rates rising, it is difficult for the Fed to extend a helping hand."

On the other hand, Lacy Hunt and Van Hoisington, long-time managers at Hoisington Investment Management, believe that the FRB may not be able to wait.

Mr. Hunt and Mr. Hoisington refer to the rise in inflation due to tariffs as a temporary and primary impact, stating that the secondary, tertiary, and subsequent contraction effects are far more significant.

They concluded that "the FRB needs to quickly transition to a more accommodative policy. It would not be wise for the FRB to wait... a far more important consideration is the impending contraction of global economic activity."