The Bitcoin (BTC) price recently experienced a sharp jump higher following the most recent US jobs report that has abated recession fears. The cryptocurrency came close to reacliaming the $57,000.
The US added a total of 142,00 jobs last month. This marks a major improvement compared to 89,000 jobs in July. The unemployment rate dropped to 4.2%.
Jason Furman, professor of the practice of economic policy at Harvard University, described the recent jobs report as “reassuring.” He has noted that the pace of jobs growth remains “mostly unchanged” over the past year. “In sum, this is a nice economy to have. The job market is chugging along nicely. Prime age employment has risen,” he added.
Heather Long, economic columnist at The Washington Post, has commented that the US jobs marked has “cooled off” a lot. At the same time, she does not rule out that the Federal Reserve might pull off a “soft landing.” The metaphor is often used to denote a scenario, in which the Fed can bring down inflation to its desired target without causing a recession.
Fed-funds futures started showing a higher probability of a 50-basis point cut following the release of the jobs report (43%).
Immediate reaction was a bump up in probability of 50bps by Fed this month (pre-jobs report on left, post-jobs report on right) per @CMEGroup #FedWatchTool pic.twitter.com/moV2TF86Qp
— Liz Ann Sonders (@LizAnnSonders) September 6, 2024
However, according to Nick Timiraos, chief economic correspondent at The Wall Street Journal, the report failed to provide an obvious signal on the size of the first cut. The figures were not good enough to douse speculation on a larger cut.
Furman believes that the Fed should start with a 25-basis point cut this September, but it should signal that more rates are coming in the near future.
