U.S. Payrolls Surprise: Bitcoin Surges as Rate Cut Bets Rise
U.S. payrolls unexpectedly declined in September, sparking concerns about employer caution and boosting bets on a Federal Reserve interest rate cut in October. This shift in expectations has supported digital assets like Bitcoin, which surged beyond $116,000 following the news.
The ADP National Employment Report revealed a loss of 32,000 private sector jobs, defying expectations of a gain. Small and medium businesses, particularly in leisure, hospitality, and professional services, bore the brunt of the losses. This weak data has led traders to anticipate another interest rate cut by the Fed, with the probability of a rate hike falling to six percent on Polymarket. Citi economists now expect two 25 basis point cuts in October and December, aligning with the Fed's dot plot.
The U.S. government shutdown has added significance to private reports like the ADP data. However, Chicago Fed President Austan Goolsbee has warned against relying too heavily on ADP data, challenging its accuracy. He supports recent interest rate cuts but urges caution due to persistent inflation and the Chicago Fed's new real-time labor market monitor.
The unexpected decline in payrolls has fueled expectations of a Fed interest rate cut in October, boosting digital assets like Bitcoin. Traders now await official government data, as the shutdown suspends many reports. The Fed's next move will likely influence market sentiment and digital asset prices.
