Markets are further reducing expectations for another interest rate cut this year after the Bureau of Labor Statistics said it will not release employment data for October and that the November report will be delayed until after the Federal Reserve’s December report.
Traders on the Chicago Mercantile Exchange (CME) now see just a 33% chance that the Federal Reserve will cut rates at its final policy meeting in 2025, down from 50% just a day earlier. Let’s remember that less than a month ago, the chances of a rate cut in December were more or less 100%. However, following the Federal Reserve’s late October meeting, Chairman Jerome Powell surprised markets by pouring cold water on ideas.
Over the following weeks, speeches and interviews with Fed members revealed how deep the divisions were at the central bank over further easing of monetary policy, including the release this afternoon of the minutes of that October meeting.
There are surely countless reasons for the decline in cryptocurrency prices in recent weeks, but the reversal of expectations about future monetary easing looms large. Bitcoin stood at $110,000 just before Powell’s comments in late October and at $89,000 currently.
The carnage on cryptocurrency-related stocks has been even worse, with previously hot names like stablecoin issuer Circle (CRCL) falling 10% on Wednesday and nearly 50% over the past month. The Bitcoin Treasury Strategy is also down 10% today and almost 40% over the last month.
Today’s news on the jobs reports means that Fed policymakers will be without one of their most important inputs at the December meeting. The Federal Reserve has long based its decisions on real-time labor and inflation data. Without new numbers showing a material slowdown in employment, it’s hard to see hawks backing down to support another rate cut this year.
President Donald Trump added to the noise this week, saying at an investment forum on Wednesday that he would have already fired Jerome Powell if it weren’t for Treasury Secretary Scott Bessent urging that the Federal Reserve chair be allowed to remain in office until his term ends in 2026.
“The only thing Scott is wasting on is the Federal Reserve, because the Fed rates are too high, Scott,” Trump said. “And if you don’t fix it quickly, I’ll fire you.”
However, there will be a national employment report between now and the Federal Reserve’s December meeting. That’s the September issue and it will be published Thursday morning. Given the “age” of the data, it is difficult to imagine it having an effect on central bank members, whether dovish or hawkish.
