The price of Bitcoin remained steady despite soft economic data and rising bets on significant Federal Reserve rate cuts in the second half of the year.
Job Market Update
July Employment Data
In July, the U.S. added just 114,000 jobs, falling short of the expected 175,000 and down from June’s revised 179,000. The unemployment rate rose to 4.3%, higher than June’s 4.1% and above the forecasted 4.1%, according to the Bureau of Labor Statistics.
Bitcoin’s Reaction
Bitcoin Price Stability
Bitcoin’s price showed little reaction to the jobs report, trading at $64,500, virtually unchanged from 24 hours ago.
Traditional Markets React
Market Movements
Traditional markets had a stronger reaction. The 10-year Treasury yield fell 15 basis points to 3.83%, and the two-year yield dropped 23 basis points to 3.93%, both reaching their lowest levels in over a year. Nasdaq futures fell 2.3%, and the S&P 500 decreased by 1.6%. The dollar declined by 0.6%, while gold rose 1.3% to a record high of $2,513 per ounce.
Wage and Hourly Data
Earnings and Hours
Average hourly earnings increased by 0.2% in July, below the expected 0.3%. Annually, earnings rose 3.6%, compared to the expected 3.7% and June’s 3.8%. Average weekly hours were 34.2, missing the forecast of 34.3.
Fed Rate Cut Expectations
Increased Rate Cut Bets
With a 25 basis point Federal Reserve rate cut already priced in for September, traders are now betting on a 50 basis point cut, with a 70% chance according to CME FedWatch. Traders are also beginning to bet on a total of 125 basis points in cuts by year-end, up from 75 basis points expected just one day earlier.
