Empire State manufacturing data reveals significant weakness in the US economy. The Empire State Manufacturing Index comes in at -9.1, which is much worse than the expected forecast of -4.3. The previous data turned out to be -1.5. The crypto market is rallying as the newly released data reinforces the idea that the Fed has gone overboard with its restrictive monetary policy.
Bitcoin is up 0.64% in the past hour and is trading at $19,557. Similarly, Ethereum prices are up 0.51% in the past hour and ETH is trading at $1322.
Cardano and Solana have also seen strong price increases. ADA rose 0.8% and is trading at $0.3735. Meanwhile, Solana’s price is up 1.1% and is trading at $30.81.
What is Empire State Manufacturing Index
The Empire State Manufacturing Index reveals the state of affairs in New York. Negative data points to deteriorating conditions in New York, while the positive index points to an improving business environment. It is one of many factors that reveal the weakness of the US economy.
The Federal Reserve is responsible for protecting the economy from abnormal economic conditions. As a result of rising inflation levels, the Fed is engaged in quantitative tightening and rate hikes. The central bank raised interest rates by four consecutive 75bp hikes. The Fed’s aggressive stance has not led to much success.
The most recent consumer price index pointed to rising inflation levels in the economy. Experts believe another jumbo walk is very likely from the central bank.
However, market participants are not happy with the Fed’s aggressive stance. They believe the bank is weakening the US economic outlook. The World Bank estimates that the global economy will experience a major recession in 2023.
Will the Fed Turn for a Crypto Rally?
The crypto market is recovering on the expectation that the Fed will flip over fears of a recession. However, the Fed has stated that the cost of doing too little to curb inflation is much higher than doing too little.
Nidhish is a technology enthusiast whose goal is to find elegant technical solutions to solve some of society’s biggest problems. He is a big proponent of decentralization and wants to work on the mainstream adoption of Blockchain. He also likes almost all popular sports and likes to talk about a wide variety of topics.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication is not responsible for your personal financial loss.
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