The Federal Reserve has been busy. Two years ago, they were fighting inflation like it was a fire spreading through the economy. Interest rates shot up fast to cool things down. Now, it’s all about jobs.
Federal Reserve Chair Jerome Powell laid it out at the Jackson Hole conference in Wyoming: the Fed’s new top priority is protecting the job market. And guess what? That means interest rates could be heading back down.
The big question is, are we looking at a job market that’s just slowing down, finding its balance? Or is this the beginning of a bigger drop in employment?
The Fed’s got some catching up to do. In September, they’re expected to update their interest rate forecasts. They might show us how fast those cuts are coming. Just a few months ago, back in June, they were still stuck on inflation worries.
They thought the unemployment rate would stay steady around 4% and only expected one minor rate cut this year. But things change fast. Now they’re talking about job market risks and considering a different approach.
The U.S. economy added 206,000 jobs in June, beating what the analysts expected. But, of course, nothing’s ever that simple. The unemployment rate did creep up to 4.1%. So, what does that mean? It suggests that the economy is still in a decent place, but there’s no guarantee it’s going to stay that way.
Bitcoin, cryptos, and the Fed’s new playbook
If you’re into crypto, you know that everything affects Bitcoin and her kids, and the job market’s stability is no different. A stable job market tends to make people feel secure.
When folks feel secure, they’re more likely to throw some cash at riskier things—like Bitcoin. But the crypto market didn’t exactly go wild over the latest job reports.
Bitcoin’s price did some flip-flopping, which just goes to show that the link between traditional economic indicators and crypto is still a bit of a mystery.
“People are still trying to figure out how to read these tea leaves,” says a trader we talked to. “It’s not like stocks or bonds. Crypto reacts differently, and sometimes not at all.”
Even with stable employment figures, the Federal Reserve’s moves on interest rates could still shift the narrative.
If the Fed cuts rates, that could flood the market with liquidity and boost Bitcoin’s price. Some people are already betting on this. The mere talk of a potential rate cut in September had Bitcoin prices nudging upwards.
Right now, Bitcoin’s price has been bouncing around. We’ve seen it range between $57,500 and $62,000 recently. No one really knows where it’ll go next. If jobless claims drop, Bitcoin could take off again. Some are even saying it might hit new highs.
Just remember, in this game, nothing is ever certain.
