ETH and BTC Skid After Strong Jobs Report Augurs More Rate Hikes
Resurgent Dollar Sends Risk Assets Tumbling; BTC and ETH Swoon
Global markets traded lower on Friday after the latest report from the U.S. Bureau of Labor Statistics showed that the job market remains resilient in the face of the Federal Reserve’s efforts to dampen inflation by cooling the economy.
Employers filled 263,000 positions in September, slightly below the consensus estimate of 275,000. The unemployment rate ticked lower to 3.5% from 3.7% in August. Economists had expected it to remain unchanged.
Polygon Holding Firm
Wall Street clearly didn’t like the data, as the S&P 500 Index is trading 2% lower and the tech-heavy Nasdaq has shed more than 3% in early afternoon trading New York time.
Bitcoin is down nearly 3% on the day and back under $20,000 while Ether is holding up a little better with a 2% decline. Top DeFi names such as Solana, Polkadot, and Cardano also took a hit, though Polygon appeared to be faring best in the group with a 1.6% decline.
ETH Price + BTC Price, Source: The Defiant Terminal
Meanwhile, the U.S. Dollar Index (DXY) has reversed its losses from earlier in the week and is on track to close the week in the green.
The U.S central bank has hiked interest rates from nearly zero at the start of the year to above 3% today, making it clear that cracking down on inflation is its top priority.
US Federal Funds Rate
This aggressive stance has raised concerns about slowing economic growth and stoked fears that an overcorrection could lead to a recession. Global markets are already having their worst year in over five decades.
Nevertheless, today’s report gives the Fed no reason to deviate from its present course. Indeed, federal funds futures indicate an 82% probability of another 0.75% hike in November, up from 75% before the report.
Source: CME FedWatch
“We currently do not face a tradeoff between our employment objective and our inflation objective, so monetary policy can and must be used aggressively to bring down inflation,” Fed Governor Waller said in a speech yesterday.
Total crypto market capitalization stands at $979B, down 2.4% in the past 24 hours.