Bitcoin price increased by approximately $1000 following the employment data release, as we reported in the latest announcement. The data is quite positive for cryptocurrencies because Non-Farm Employment came in below 150,000, which could force the Fed to cut rates. Analysts from Goldman and other companies mentioned yesterday that this scenario could contribute to the pace of rate cuts.
Fed Member Speaks
While this article was being prepared, Fed member Williams made significant remarks. Fed members generally use language that tries to downplay the alarm in employment data. While inflation was rapidly rising in 2021, they did the same for the increase in inflation. Later, we saw them gradually acknowledge the extent of the risk.
This suggests that especially from next year, the Fed might strengthen its dovish tone as employment weakens. Key points from Williams’ statements are as follows:
- The employment market is more balanced and not the main source of inflation.
- Fed policy has been effective in restoring price stability.
- Monetary policy could shift to a more neutral stance based on data.
- I am ready to start the rate-cutting process.
- I expect the unemployment rate to be around 4.25% by the end of the year.
- Risks to the economy include a slowdown in global growth.
- Risks to the outlook include further weakening of the employment market.
- I welcome disinflation trends.
- Inflation expectations are well anchored.
- I am confident that inflation pressures are diminishing.
- I expect inflation to be close to 2% next year.
- I expect long-term unemployment to be around 3.75%.
- Now is a suitable time for the Fed to lower the interest rate.
According to the FedWatch tool, the current rate cut expectation is as shown in the image. The market now expects a 50bp cut with a 59% probability.
