Markets are further lowering expectations for another interest rate cut this year after the Bureau of Labor Statistics said it would not release jobs data for October and that the November report would be delayed until after the Federal Reserve’s December report.
Traders on the Chicago Mercantile Exchange (CME) now see just a 33% chance the Federal Reserve will cut rates at its final policy meeting of 2025, down from a 50% chance 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 meeting in late October, Chairman Jerome Powell shocked markets by throwing cold water on the ideas.
In the weeks that followed, speeches and interviews with Fed members revealed how deep the divisions were within the central bank over further easing of monetary policy, including this afternoon’s release of minutes from that October meeting.
There are surely myriad reasons for the fall in cryptocurrency prices in recent weeks, but the reversal of expectations for future monetary easing is significant. Bitcoin was 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 previously red-hot names like stablecoin issuer Circle (CRCL) down 10% on Wednesday and nearly 50% over the past month. The company’s Bitcoin treasury strategy is also down 10% today and almost 40% over the past month.
Today’s news about the jobs reports means Fed policymakers will find themselves deprived of one of their most important contributions at the December meeting. The Fed has long based its decisions on real-time data on employment and inflation. Without new numbers showing a significant slowdown in employment, it’s hard to imagine hawks reversing course to support another rate cut this year.
President Donald Trump added to the noise this week, telling an investment forum Wednesday that he would have already fired Jerome Powell if Treasury Secretary Scott Bessent had not urged letting the Fed chair stay on until his term ends in 2026.
“The only thing Scott is going after is the Fed, because the Fed, the rates are too high, Scott,” Trump said. “And if you don’t fix it soon, I’m going to fire your ass.”
There will, however, be a national employment report by the December Fed meeting. This is the September issue and should be released Thursday morning. Given the “oldness” of the data, it is difficult to imagine that it will have any effect on members of central banks, whether dovish or hawkish.
