U.S. economy continues to show indications of strength, employers added 263,000 jobs Bitcoin in November, down from an upwardly revised 284,000 in October but exceeding predictions of 200,000. As anticipated, the unemployment rate stayed at 3.7%.
On the back of the report, Bitcoin (BTC) has decreased by roughly $200 to $16,830. Given that the U.S. Federal Reserve bases its monetary policy choices in part on the monthly employment report and since this year’s crypto bear market has been exacerbated by increasing interest rates, the employment report has become crucial for traders.
In traditional markets, the 10-year Treasury yield has increased 9 basis points to 3.6% and Nasdaq futures have fallen nearly 2% in response to the positive data.
In 2022 the Fed lifted its benchmark fed funds rate from near zero to a range of 3.75% to 4%. The central bank is expected to approve another rate hike at the next meeting of its Federal Open Market Committee (FOMC) Dec. 13-14, taking the range up to 4.25%-4.5%. Index swaps are now pricing in a terminal fed funds rate of 4.95%, up from 4.6% a day ago.
“The labor market, which is especially important for inflation … shows only tentative signs of rebalancing and wage growth remains well above levels that were consistent with 2% inflation over time,” Fed Chair Jay Powell said during an event at the Brookings Institution in Washington, D.C., on Wednesday. “So despite some promising developments, we have a long way to go in restoring price stability.”
Powell made a strong implication on Wednesday that the pace of rate increases would be reduced from 75 basis points to 50 basis points this month. The Chicago Mercantile Exchange (CME)’s futures traders had factored in an 81% chance of a 50 basis point move. This percentage was 77% in the moments following Friday’s jobs report.
“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” Powell said in his Wednesday remarks. “It seems to me likely that the ultimate level of rates will need to be somewhat higher than thought at the time of the September meeting.”
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