Markets are further dialing back expectations for another interest rate cut this year after the Bureau of Labor Statistics said it would not release jobs data for October and the November report would be delayed until after December by the Federal Reserve.
Businessmen in Chicago Mercantile Exchange (CME) Now see only a 33% chance that the Federal Reserve rates will cut the final policy rates by 2025, down from just 50% in one day. Remember that less than a month ago, the chances of a December rate cut were more or less 100%. Following the Fed’s late October meeting, though, Chairman Jerome Powell surprised markets by pouring cold water on the idea.
In the coming weeks, speeches and interviews with Fed members have revealed how deep the divisions are at the Central Bank over further easing of monetary policy, including this afternoon’s exit. of minutes of the October meeting.
There are certainly plenty of reasons for the surge in crypto prices over the past few weeks, but looking back at expectations about future ease ranks high. Bitcoin stood at $110,000 just before Powell’s comments in October and at $89,000 currently.
The death in crypto-related stocks was even worse, with former red-hot names like StableCoin Issuer Circle (CRCL) down 10% on Wednesday and nearly 50% over the past month. The Bitcoin Treasury Company strategy is also down 10% today and nearly 40% over the past month.
Today’s news about the jobs report means fed policymakers will be without one of their most important inputs at the December meeting. The Fed has long based its decisions on real-time labor and inflation data. Without any fresh numbers showing a material slowdown in employment, it’s hard to see the Hawks reversing course to support another rate cut this year.
President Donald Trump added to the noise this week, telling an investment forum on Wednesday that he would have fired Jerome Powell had it not been for Treasury Secretary Scott Bessent urging to let the Fed Chair stay on the job until his term ends in 2026.
“The only thing that Scott blew was the Fed, because the Fed, the rates were too high, Scott,” Trump said. “And if you don’t fix it, I’m going to blow your ass.”
There will be a national employment report, though, between now and the Fed’s December meeting. That’s the September number and it’s due out Thursday morning. Given the “Oldness” of the data, it’s hard to imagine it having an impact on either the Dovish or Hawkish members of the Central Bank.
