According to data released today, the Purchasing Managers’ Index (PMI) for the US manufacturing sector exceeded market expectations in March, rising by 2.5 to 50.3. This marks the first expansion since November 2022, ending 16 consecutive months of contraction.
The strengthening of manufacturing activity may indicate an overall expansion of the US economy and is seen by the Federal Reserve as a signal of economic strength, affecting their expectations for future economic prospects. Generally, if the PMI exceeds expectations, the Federal Reserve is more likely to lean towards maintaining current interest rate policies or considering rate hikes, especially if other economic indicators also support trends of economic growth and rising inflation.
Data from FedWatch shows that market expectations for a rate cut in June initially fell below 50% but have now risen to 57% at the time of writing this article, indicating a wavering confidence in a rate cut by the Federal Reserve in June.
Following the news, the US dollar remained strong, with an intraday increase of nearly 0.5%, while the three major US stock indices declined after the opening. Meanwhile, cryptocurrencies such as Bitcoin were also unable to escape the impact, with Bitcoin falling below $69,000 and Ethereum dropping below $3,500 in the evening.
(This article is authorized to be reprinted from GT Radar)
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