Markets shifted their attention from a hotter-than-expected inflation print to a weakening labor market, and crypto traders responded quickly. Weekly initial jobless claims jumped to 263,000 — the highest level in nearly four years — topping forecasts and rising from 236,000 the prior week. That signal of cooling growth overtook the headline CPI readings and re‑priced risk across asset classes.
The August Consumer Price Index showed inflation running above the Fed’s target, with headline at 2.9% and core at 3.1%. Ordinarily those figures would argue for caution on rate cuts. Instead, investors focused on the jobs data: the 10‑year Treasury yield slid about five basis points to just below 4%, and markets raised the odds of imminent Federal Reserve easing.
Crypto markets reflected that shift. Bitcoin and ether traded modestly higher, but the largest moves were in altcoins — a common pattern when traders anticipate easier monetary policy. Solana rallied roughly 11% week-over-week to multi-month highs, dogecoin jumped about 17%, and XRP climbed back above $3. These gains point to renewed risk appetite and rotation into yield- and growth-sensitive tokens as rate-cut expectations rise.
Economists warn the combination of persistent inflation and slowing growth nudges the U.S. toward stagflation, a policy dilemma in which rate cuts could reignite inflation while tighter policy could deepen a slowdown. “Evidence of a slowdown in the U.S. is now appearing in the hard data,” said Brian Coulton, chief economist at Fitch.
For crypto investors the practical takeaway is twofold: macro data can swiftly change cross-asset sentiment, and altcoins often amplify moves when policy expectations shift. That can create trading opportunities but also raises risk — positions driven by macro narratives can unwind quickly if new data surprises. Maintain disciplined risk management through position sizing, stop-losses and portfolio diversification.
Source: CoinDesk. Read the original coverage for full details.