The U.S. Department of Labor announced last night (26) that the latest data shows that for the week ending December 21, the number of initial jobless claims in the U.S. fell to the lowest level in nearly a month after seasonal adjustment, indicating that although the labor market is cooling, companies have still avoided a large-scale layoff wave, and this also suggests that the Federal Reserve may not lower interest rates further.
Bitcoin experienced a rapid decline yesterday afternoon, dropping from $98,500 by $3,000, causing many long positions to stop out. It is currently oscillating narrowly above $95,000, although it has broken through $96,000 several times, it quickly fell back, and there is still no clear trend.
Initial jobless claims are lower than expected.
On the other hand, the U.S. Department of Labor announced last night (26) that the latest data shows that for the week ending December 21, the number of initial jobless claims in the U.S. fell to 219,000, a decrease of 1,000 from the previous week and lower than the market expectation of 224,000, marking the lowest level in nearly a month. This indicates that although the labor market is cooling, companies have still avoided a large-scale layoff wave, and this also suggests that the Federal Reserve may not lower interest rates further.
Meanwhile, the overall unemployment rate in the U.S. is currently 4.2%. Based on data from the past decade, while the labor market is trending weaker, the unemployment situation remains relatively mild, with no signs of deterioration. Jefferies economist Thomas Simons also stated:
Although the hiring pace has slowed, the rate of layoffs and firings has not accelerated, reflecting a greater emphasis by companies on retaining scarce labor.
The probability of the Fed pausing interest rate cuts in January is as high as 91.4%.
According to the CME Group FedWatch tool, the current market expects the Federal Reserve to pause its interest rate cuts in January next year, maintaining the federal benchmark interest rate in the current range of 4.25% to 4.5% with a probability of 91.4%, consistent with predictions from a week ago.
Source: CME Group FedWatch tool.
Economists: The risk of a U.S. economic recession is decreasing.
After the U.S. employment data was released last night, the U.S. stock market and Bitcoin did not show significant reactions. As 2024 is about to end, U.S. inflation is almost back to pre-pandemic levels, and the economy continues to grow, with the labor market still showing resilience. Therefore, economists expect the risk of a U.S. economic recession to decrease, and a soft landing may be achievable.
However, it is worth noting that a major uncertain factor next year may be the tariff policies that President Trump, if elected, might implement. Goldman Sachs Chief Economist Jan Hatzius and others pointed out:
The biggest risk is large-scale comprehensive tariffs, which could severely impact economic growth.
Pantera founder: Bitcoin has reached escape velocity.
If there is no interest rate cut in January next year, it may not be good news for U.S. stocks and Bitcoin, but regarding Bitcoin's long-term trajectory, Pantera founder Dan Morehead recently stated in an interview that in 2024, Bitcoin has shown a completely different situation compared to before; BTC has reached escape velocity and will not see large-scale setbacks again.
In 2013, there were concerns about whether regulators would ban Bitcoin. The situation in 2024 is completely different; Bitcoin has reached escape velocity.
