The August U.S. jobs report came in softer than expected, pushing markets to price a higher probability of a Federal Reserve interest-rate cut at the Fed’s mid-September meeting — and opening the door to a larger 50 basis point move instead of the widely assumed 25.
The Bureau of Labor Statistics reported 22,000 nonfarm payroll additions for August, well below economists’ 75,000 estimate and down from July’s revised 79,000. The unemployment rate ticked up to 4.3%, while average hourly earnings rose 0.3% for the month and 3.7% year-over-year, both matching forecasts. Revisions trimmed June by 27,000, producing the first negative monthly print since 2020 if taken at face value.
Markets reacted quickly. Bitcoin gained roughly $500 to about $112,800 in the minutes after the report, reversing a portion of this week’s losses from record highs above $124,000 in mid-August. Gold surged past $3,600 to a new record near $3,644 per ounce. U.S. stock futures moved higher, the dollar weakened and the 10-year Treasury yield fell to around 4.11%.
Why this matters for crypto: easier monetary policy generally lifts risk assets by lowering real yields and encouraging liquidity into speculative markets. That dynamic helps explain the initial crypto and gold rallies. But traders should note that Bitcoin’s recent run-up had already shown signs of strain — Powell’s dovish pivot in late August produced only a short-lived bounce — so a Fed move, even a larger-than-expected one, may not guarantee a sustained rally.
Putting a 50 basis point cut on the table changes expectations. A larger cut would signal a faster pivot toward accommodation and could re-ignite risk appetite across crypto, equities and commodities. Conversely, if markets price in a bigger cut and growth or inflation data turns unexpectedly stronger, volatility could spike as positions unwind.
Risk awareness: Market reactions to macro data can be rapid and unpredictable. This piece is informational and not investment advice; trading crypto carries significant risk.
Source: CoinDesk. Read the original coverage for full details.