Key highlights:
- Bitcoin climbed to ~$87,000 after September payrolls came in at just 29,000 (vs. 84–90K expected), with unemployment rising to 4.2%.
- The dovish shift drove a broad risk-on rally: S&P 500 +0.89%, Nasdaq +1.27%, gold surged, 10-year yield fell to 5.205%, and total crypto market cap crossed $3T.
- Economists flagged seasonal adjustment factors and Labor Day timing as potential distortions, while low initial jobless claims and solid corporate profits suggest the labor market may not be as weak as the headline number implies.
Bitcoin climbed to $87,000 on Friday as weaker-than-expected US employment data pushed financial markets to reassess the Federal Reserve’s next interest-rate decision.
The US economy
Healthcare added 17,000 jobs, followed by construction with 11,000 and manufacturing with 9,000. Government employment declined by 17,000, while private payrolls increased by 46,000.
The weaker data immediately affected expectations for the Fed’s Oct. 27-28 meeting. Kalshi put the probability of the central bank holding rates at 85%, while market expectations for another rate increase declined sharply.
CME Group’s FedWatch tool had placed the probability of another hike at 22% before the report, down from about 69% a week earlier. Following the release, some estimates put the probability as low as 12%.
The shift came after softer inflation data earlier in the week and comments from New York Fed President John Williams that there was no immediate need for further monetary tightening.
For Bitcoin, changing rate expectations are important because interest rates affect borrowing costs and demand for risk-sensitive assets.
Lower rates can improve the appeal of assets such as cryptocurrencies, although expectations of a policy pause do not guarantee further gains, particularly if economic conditions continue to weaken.
Markets rally across stocks, bonds, and precious metals after jobs shock
US equities also advanced after the report as the Dow Jones Industrial Average opened up 0.67% at 51,266.64, while the S&P 500 gained 0.89% to 7,734.72.
The Nasdaq Composite rose 1.27% to 27,216.91, with more than $710 billion added to the U.S. stock market.
Treasury yields also moved lower as traders adjusted their expectations for interest rates. The two-year yield fell three basis points to 4.758% after dropping as much as eight basis points earlier in the session.
The 10-year yield declined three basis points to 5.205%, while the 30-year yield fell 1.6 basis points to 5.588%.
The U.S. dollar weakened, ending a four-day winning streak for the dollar index, while gold and silver also advanced. Gold and silver surge as $400 BILLION is added to their combined market value in just 8 minutes.
However, the weak employment figures came with some caveats. Economists pointed to seasonal adjustment factors and the timing of the Labor Day holiday as possible explanations for unusually weak September job growth and downward revisions to previous months.
Initial unemployment claims have also remained relatively low, while corporate profits and domestic demand continue to support economic activity.
The report therefore left markets balancing weaker hiring, which could support expectations for a Fed pause, against an economy that has yet to show widespread layoffs.
Source:: US Jobs Report Sends Fed Pause Odds to 85%: How BTC and Markets Reacted