According to Blockworks, Bitcoin (BTC) and Ether (ETH) experienced a recovery on Thursday, in line with the stock market, as the Federal Reserve assured traders that rate cuts are anticipated later this year. Bitcoin regained the $68,000 mark, rallying nearly 4% in 24 hours following a lackluster start to Q2 of 2024. Ether also made a comeback, increasing over 2% to trade just below $3,400 at the time of reporting.
The S&P 500 and Nasdaq Composite indexes also saw a turnaround on Thursday, gaining 0.7% and 1.1% respectively, as traders processed comments made by Federal Reserve Chairman Jerome Powell on Wednesday. Powell confirmed this week that lower rates are still expected to come at 'some point' before the end of 2024. However, he noted that the path to lower inflation has been 'bumpy', and with better-than-expected data, such as Tuesday's March ISM Manufacturing PMI topping 50 for the first time in a year and a half, the Fed's path forward remains uncertain.
Noelle Acheson, author of the Crypto is Macro Now newsletter, commented on the Federal Reserve's 'data dependent' approach, stating that it provides public reassurance that reality matters more than theory, and allows flexibility to adapt to events. However, she also pointed out the downside of this approach, as the data is backward-looking, which can delay action. There is also some disagreement about which metrics are truly important.
The Bureau of Labor Statistics is set to release the March employment report on Friday. Analysts predict that unemployment will remain steady at 3.9%, significantly below the historical average of around 5.7%. If the economy appears to be accelerating too quickly, central bankers may opt for the 'no landing' strategy, meaning a return to hiking rates, according to analysts.