In October, cryptocurrency investors anticipated a 25 basis point interest rate cut, expecting a similar move in December. However, the outcome did not align with expectations. Despite positive PCE data, warnings issued earlier this week pointed out potential employment improvements, a concerning detail. Today, the week’s first significant data has been released.
Interest Rates: A Change in Course?
In recent weeks, we shared analyses from approximately 10 Federal Reserve members, highlighting a common view: the inflation rise has captured most members’ utmost attention. Apart from three members, there was no grave anticipation of an employment collapse. Previous employment figures might have alarmed the Fed into lowering rates, but today’s JOLTS and Consumer Confidence data bring worrying insights for inflation and employment.
The persistence of interest rates is questionable, and the upcoming Non-Farm Employment and Unemployment Rate reports on Friday could reinforce the view of steady interest rates if they meet or exceed expectations. This could indicate an intensified decline enveloping cryptocurrencies. Occasionally, crypto markets exhibit indifference to macroeconomic forces unless an exceptional period arises, increasing the probability of a downturn risk.
US JOLTS Report Examination
Latest statistics revealed an employment warning. Notably, there was a decrease in job listings within construction and manufacturing last month, though other industries saw increases. Comparing to the same period last year, hirings rose slightly, with job openings reducing from 7.649M last July to 7.22M in August. It appears the employment sector isn’t experiencing continuous contraction.
Open job positions hint at a stabilization, seen as they reached 7.649M in August 2024, climbed to 7.712M in May 2025, then declined to 7.22M recently, suggesting a stabilization in employment contractions relative to July 2025 observations.
If Friday’s data corroborates this scenario, many Fed members fighting inflation above the 2% target for over four and a half years could retract from rate cuts. This isn’t good news.
US Consumer Confidence
The vital aspect of the Consumer Confidence report is the 12-month inflation expectation. After three consecutive declines, consumer inflation expectations rebounded, surpassing 6.2% in August compared to 5.7% in July. Nevertheless, these figures are distant from the April fear-inflated peak expectation of 7%, unveiling the recent PCE data’s enlightening revelations.
“Both current situation and expectation components have weakened. Notably, consumer assessments of present job opportunities declined for eight consecutive months; however, stronger views on current business conditions mitigated the decline in the Present Situation Index. Meanwhile, pessimism about future job opportunities slightly rose, with a minor dip in future income optimism. Nevertheless, these were partially offset by stronger future business conditions expectations.
Consumer written responses indicated a slight rise in references to tariffs, primarily linked to persisting concerns over price hikes. Additionally, mentions of high prices concerning food and grocery store products, intertwined with inflation, resurged in August.”