Bitcoin has once again risen above $61,000, which may be related to the revision of the US labor market data yesterday and the minutes of the Fed's meeting in the evening. Yesterday, before the Fed's meeting minutes, the US Bureau of Labor Statistics released a key data revision, which significantly lowered the number of new jobs between April 2023 and March 2024 by 818,000, reducing the employment growth rate in the past year to 1.3%, which means that the US employment growth during this period was not as strong as previously estimated. In fact, the cooling of the labor market may be earlier and more persistent than expected, and the market began to worry about the impact on economic growth and inflation expectations.
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Fed FOMC meeting minutes are dovish: rate cut is possible in September

Bloomberg reported that several Fed officials acknowledged at the July 30-31 meeting that there was a legitimate case for a rate cut before the Fed's policy committee voted unanimously to keep interest rates steady. The minutes of the meeting released in Washington on Wednesday said: "Several members judged that the recent increase in inflation and unemployment provided a reasonable basis for lowering the target range by 25 basis points at this meeting or that they could have supported such a decision."

“The vast majority of members judged that if data continued to move in line with expectations, it would likely be appropriate to ease policy at the next meeting,” the minutes said.

The minutes from the meeting highlighted a growing realization among policymakers that the risks to achieving inflation and employment goals are now roughly equal, even as borrowing costs remain at 20-year highs. Fed Chairman Jerome Powell said at a July 31 press conference that the committee wants "greater confidence" that inflation will reach its 2% target before it starts cutting rates.

“Most participants noted that risks to the employment objective had increased, while many noted that risks to the inflation objective had decreased,” the minutes said. “Some participants noted that a further gradual easing of labor market conditions could turn into a more significant deterioration.”

The discussion suggests the committee has begun to shift toward a labor market risk management approach. Although the 25 basis point rate cut in September marked a small adjustment toward normalization, some analysts said the Fed needs to accelerate the pace of rate cuts to ensure a soft landing for the U.S. economy.

“It comes down to whether the Fed needs to cut rates sooner,” said Priya Misra, managing director and portfolio manager at JPMorgan Asset Management. “If the risk is a deterioration in the labor market, I think the pace of rate cuts should be faster, 50 basis points at a time until we get back to neutral, and then we can adjust the pace of rate cuts more cautiously.”

Futures markets are pricing in about 100 basis points of rate easing over the rest of the year.

The Federal Reserve's prospect of a dovish rate cut in September provided buying support for the cryptocurrency market.