U.S. Labor Dept. Non-Release Alters Fed Rate Cut Outlook

The U.S. Labor Department will not release October’s employment report, affecting federal funds futures and expectations for a Fed rate decision on December 10th in Washington, D.C.

This omission influences Federal Reserve policy, lowering prospects for an imminent rate cut and impacting market sentiment and trading strategies.

Fed Rate Cut Expectations Shift as Data Lags

The U.S. Labor Department’s announcement that October employment data would not be released triggered repricing in the interest rate expectations. Traders now predict Fed’s key interest rate to remain between 3.75%-4% during the upcoming December policy meeting. This shift stems from insufficient data availability, which impacted the financial markets.

Market reactions were swift, with a marked decline in bets on a 25 basis point rate cut. Federal funds futures showed a drop from an initially priced 11 basis point cut to just 6 basis points, suggesting limited chances of a near-term Fed rate decrease. Leah Traub of Lord Abbet highlighted, “the absence of unemployment data for October, coupled with delayed November figures, lowers the likelihood of a rate cut,” hinting at diverging Fed committee views.

Jerome Powell, Chair, Federal Reserve, stated, “The Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. In considering additional adjustments…, the Committee will carefully assess incoming data…” Federal Reserve

Crypto Market Faces Pressure Amid Interest Rate Stability

Did you know? Times when U.S. data failures have stalled markets often mirror today’s risk sentiment shifts. Without data, crypto markets historically underperform when Fed’s stance appears aggressive.

Bitcoin (BTC), currently priced at $88,829.03, dominates the market with 58.66%, per CoinMarketCap. Its market cap stands at approximately $1.77 trillion, with recent price declines of 4.98% over 24 hours, totaling a 30-day drop of 19.89%. Trading volume has contracted by 38.63% to $72.50 billion.

The Coincu research team notes possible conservative shifts in financial and regulatory strategies, as limited rate cuts may discourage high-risk investments in the tech sector. Historical trends suggest institutions may retain a cautious approach, ensuring known safe assets gain favor under sustained interest rates.