š A single nonfarm payroll report has pinned down the October rate hikeāmarkets only bought the ālaterā scenario
In September, nonfarm added only 29,000 jobs. Expectations were 84,000. The miss is pretty big.
At 8:30, once the data came out, the probability of an October hike collapsed. The CME FedWatch fell from about 36% a week ago to 17%, and Kalshi dropped from nearly 70% to 18%. As of today, Polymarket assigns an 82.5% probability that the October policy meeting will hold steady. On employment, the Fed most likely wonāt move in October.
Itās not just September thatās weak. August was revised down from 162,000 to 133,000, and July was changed from +21,000 to -10,000. Combined over two months, thatās a cut of 60,000, with July flipping negative outright. The three-month average net new jobs is now only 51,000.
Break it down and itās not as scary. In the household survey, employment rose by 406,000, labor force increased by 485,000, and the participation rate climbed to 61.8%āthe highest since May. The unemployment rate rose to 4.2%, likely because more people entered the labor force to look for work; thereās no sign of layoffs increasing. U-6 (which includes discouraged workers and those working part-time involuntarily) fell to 7.6%, the lowest since January 2025. Wage growth slowed back to its weakest pace since May 2021. One side is a bad employer survey; the other side is a better household survey.
The key point is that the market only bought the ālaterā rate hikeāit didnāt buy āno more hikes.ā For December, FedWatch puts the probability above 75%, Kalshi at 65%, and Polymarket at 73.5%. The Fed has said it very clearly: inflation is more dangerous than employment, and core inflation has been stuck above 3% for five years.
What hasnāt really backed off is the long end. The 30-year Treasury is 5.61%, the highest level since 2002. The short end is betting on a pause, while the long end is betting that inflation canāt be brought under controlāthose two lines are tearing at each other.
Cryptoās reaction is pretty muted. When I wrote this, four BTC price sources were clustered between $84,805 and $84,825, up 0.28% over 24 hours. This easing expectation move likely only pushed BTC from about $83,700 up to the $85,600 areaāand it was already given back within two days. In the same period, spot gold was at $4,141.8. Money for hard assets still went first to gold.
A pause doesnāt mean the cycle is over. If BTC wants to use this shift to move higher, it first needs to see when the long end starts to loosen. Watch two numbers: the last nonfarm release before the December FOMC meeting, and whether the 30-year yield can ease back from 5.6%.
$BTC $ETH
#äøę¬čŖå½é ē¤¾åŗBaoluoåøåčµę¬ #å®č§ē»ęµ #nonfarm
In September, nonfarm added only 29,000 jobs. Expectations were 84,000. The miss is pretty big.
At 8:30, once the data came out, the probability of an October hike collapsed. The CME FedWatch fell from about 36% a week ago to 17%, and Kalshi dropped from nearly 70% to 18%. As of today, Polymarket assigns an 82.5% probability that the October policy meeting will hold steady. On employment, the Fed most likely wonāt move in October.
Itās not just September thatās weak. August was revised down from 162,000 to 133,000, and July was changed from +21,000 to -10,000. Combined over two months, thatās a cut of 60,000, with July flipping negative outright. The three-month average net new jobs is now only 51,000.
Break it down and itās not as scary. In the household survey, employment rose by 406,000, labor force increased by 485,000, and the participation rate climbed to 61.8%āthe highest since May. The unemployment rate rose to 4.2%, likely because more people entered the labor force to look for work; thereās no sign of layoffs increasing. U-6 (which includes discouraged workers and those working part-time involuntarily) fell to 7.6%, the lowest since January 2025. Wage growth slowed back to its weakest pace since May 2021. One side is a bad employer survey; the other side is a better household survey.
The key point is that the market only bought the ālaterā rate hikeāit didnāt buy āno more hikes.ā For December, FedWatch puts the probability above 75%, Kalshi at 65%, and Polymarket at 73.5%. The Fed has said it very clearly: inflation is more dangerous than employment, and core inflation has been stuck above 3% for five years.
What hasnāt really backed off is the long end. The 30-year Treasury is 5.61%, the highest level since 2002. The short end is betting on a pause, while the long end is betting that inflation canāt be brought under controlāthose two lines are tearing at each other.
Cryptoās reaction is pretty muted. When I wrote this, four BTC price sources were clustered between $84,805 and $84,825, up 0.28% over 24 hours. This easing expectation move likely only pushed BTC from about $83,700 up to the $85,600 areaāand it was already given back within two days. In the same period, spot gold was at $4,141.8. Money for hard assets still went first to gold.
A pause doesnāt mean the cycle is over. If BTC wants to use this shift to move higher, it first needs to see when the long end starts to loosen. Watch two numbers: the last nonfarm release before the December FOMC meeting, and whether the 30-year yield can ease back from 5.6%.
$BTC $ETH
#äøę¬čŖå½é ē¤¾åŗBaoluoåøåčµę¬ #å®č§ē»ęµ #nonfarm
