The odds of a Federal Reserve rate cut surged to 85% after a stronger-than-expected U.S. jobs report for November. According to the Bureau of Labor Statistics (BLS), 227,000 new jobs were added last month, exceeding Wall Street’s forecast of 202,000. The report also included upward revisions for September and October, which were heavily impacted by Boeing strikes and hurricanes in the Southeast.
Macroeconomic Conditions Amid Fed Rate Cut Expectations
Despite the positive job creation, the unemployment rate ticked up to 4.2%, and the labor force participation rate slipped slightly to 62.5%. Steve Rick, chief economist at TruStage, highlighted the report’s resilience, saying, “This month’s stronger-than-expected jobs report can be partly attributed to the boost in seasonal positions in preparation for an influx of holiday shopping. This bounce back is a key indicator that while the market was hit heavily by outside forces in October, they did not leave long-term damage.”
The labor market momentum, coupled with a 0.4% monthly rise in average hourly earnings and a 4% annual increase, adds fuel to the Federal Reserve’s decision-making. The CME Group’s FedWatch tool now shows a 85% probability of a quarter-point rate cut later this month, up from 68% before the data’s release.
Bitcoin Eyes New All-Time High
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Bitcoin, currently trading at $98,000, is closely watching the Federal Reserve’s monetary policy signals. After reaching a high of $103,900 earlier, the leading cryptocurrency faced resistance near the $100,000 mark. The prospect of a rate cut could reignite bullish momentum, as lower interest rates historically favor risk assets like Bitcoin.
With the Fed expected to ease its stance, analysts predict Bitcoin could soon retest its $103,900 peak and potentially break new all-time highs. The improving labor market and potential rate cut strengthen Bitcoin’s appeal as an inflation hedge and alternative store of value.
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