The market is dashing expectations of 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 the Federal Reserve in December.
Chicago Mercantile Exchange (CME) traders now see only a 33% chance that the Federal Reserve will cut rates at its final policy meeting of 2025, down from 50% a day earlier. Recall that less than a month ago, the chances of a rate cut in December were more or less 100%. However, after the Fed meeting in late October, Chairman Jerome Powell surprised markets by pouring cold water on the ideas.
In the coming weeks, speeches and interviews with Fed members revealed how deep divisions ran at the central bank over further easing of monetary policy, including the release of the minutes of its October meeting this afternoon.
There are certainly a myriad of reasons for the decline in crypto prices over the past few weeks, but the upside is at a high level in expectations about future monetary easing. Bitcoin was at $110,000 just before Powell’s late October comments and is currently at $89,000.
The mayhem in crypto-related stocks has gotten even worse, with already popular names like stablecoin issuer Circle K (CRCL) plunging 10% on Wednesday and down nearly 50% in the past month. Bitcoin Treasury Company Strategy is also down 10% today and nearly 40% in the past month.
Today’s news about the jobs report means Fed policymakers will be without one of their most important inputs at their December meeting. The Fed has long based its decisions on real-time labor and inflation data. Without any recent data showing a material slowdown in employment, it is difficult to see those favoring another rate cut this year backing down.
President Donald Trump added to the noise this week by saying at an investment forum on Wednesday that he would have fired Jerome Powell earlier if Treasury Secretary Scott Besant had not urged him to let the Fed chair remain on the job until his term ends in 2026.
“The only thing Scott is pushing this on is the Fed, because the Fed’s rates are too high, Scott,” Trump said. “And if you don’t fix it soon, I’ll set your ass on fire.”
However, there will be a national employment report between now and the Fed’s December meeting. This is the September number and it will be released on Thursday morning. Given the “oldness” of the data, it is hard to imagine what impact it would have on either docile or aggressive central bank members.