Markets further scaled back expectations of another rate cut this year after the Bureau of Labor Statistics said it will not release jobs data for October and the November report will be delayed until after the Federal Reserve’s December.
Traders on the Chicago Mercantile Exchange (CME) now see just a 33% chance of the Federal Reserve cutting interest rates at its final policy meeting in 2025, down from 50% just a day earlier. Remember that less than a month ago the chances of a rate cut in December were more or less 100%. However, after the Fed’s meeting in late October, Chairman Jerome Powell shocked the markets by pouring cold water on ideas.
In the weeks that followed, speeches and interviews with Fed members revealed how deep divisions were at the central bank over further easing monetary policy, including this afternoon’s release of the minutes of the October meeting.
There are probably countless reasons for the plunge in crypto prices over the past few weeks, but the reversal in expectations of future monetary ease ranks high. Bitcoin stood at $110,000 just before Powell’s comments in late October and at $89,000 currently.
The carnage in crypto-related stocks has been even worse, with formerly red-hot names like stablecoin issuer Circle ( CRCL ) down 10% on Wednesday and nearly 50% over the past month. Bitcoin financial firm Strategy is also down 10% today and nearly 40% over the past month.
Today’s news on 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 new numbers showing a significant decline in employment, it is hard to see the hawks returning to support another rate cut this year.
Adding to the noise this week, President Donald Trump said at an investment forum Wednesday that he would have already fired Jerome Powell if Treasury Secretary Scott Bessent had not called for the Fed chair to remain in the job until his term ends in 2026.
“The only thing Scott is blowing on is the Fed, because the Fed, interest rates are too high, Scott,” Trump said. “And if you don’t get it fixed soon, I’ll fire your ass.”
However, there will be one national employment report between now and the Fed’s meeting in December. It’s the September issue, and it’s due out Thursday morning. Given the “old” age of the data, it’s hard to imagine it having an effect on either dovish or hawkish central bankers.
