US Federal Reserve officials backtrack from early rate cuts after Friday\u2019s strong jobs report shows resiliency in the US economy. Federal Open Market Committee (FOMC) members Austan Goolsbee and Michelle Bowman are more reluctant to rate cuts in the first half of 2024.<\/p>\n
Jobs Data Lowers Odds of Fed Rate Cut in May or June<\/h2>\n
US non-farm payrolls<\/a> increased by 353K in January, rising the most in 12 months, above market expectations of 180K. The strong jobs report was hotter as compared to an upwardly revised 333K in December. The <\/span>unemployment rate held steady at 3.7%. The Fed has kept interest rates unchanged<\/a> for four consecutive times, and the jobs data clearly indicated that there is more room for Fed to delay rate cuts post-June.<\/span><\/p>\n <\/p>\n Federal Reserve Bank of Chicago President Austan Goolsbee<\/strong> said he needs further proof the Fed is on track toward its 2% inflation goal before cutting interest rates. He rules out interest rate cuts in March, as hinted by Fed Chair Jerome Powell in the FOMC press conference.<\/p>\n \u201cI don\u2019t like tying our hands ahead of time when we\u2019ve got weeks and months of data to come in. We ought to base those decisions on how the actual data come through. More and more progress like what we have seen on inflation and on jobs is what we need to see to feel comfort that we\u2019re on target.\u201d<\/p>\n In addition, Federal Reserve Governor Michelle Bowman<\/strong> expects inflation to cool further as the Fed keeping interest rates at their current level. She said it\u2019s too soon for Fed officials to consider cutting rates, as per<\/a> Reuters.<\/p>\n <\/p>\n \u201cIn my view, we are not yet at that point,\u201d said Bowman. \u201cI will remain cautious in my approach to considering future changes in the stance of policy. Reducing our policy rate too soon could result in requiring further future policy rate increases to return inflation to 2% in the longer run.\u201d<\/p>\n <\/p>\n The US economic data are coming in hotter, including the last retail sales print, indicating the resiliency of the US economy. BlackRock<\/a> expected the Fed can start rate cuts in June, earlier than the European Central Bank (ECB). The Fed hinted to cut rates by 75-100 basis points by the end of the year.<\/span><\/p>\n \u201cWe do expect the Fed to lower interest rates this year,\u201d Truist managing director Chip Hughey says. \u201cI just think they\u2019re going to be very cautious and move very slowly.\u201d pic.twitter.com\/zhNGDmTYmw<\/a><\/p>\n \u2014 Yahoo Finance (@YahooFinance) February 2, 2024<\/a><\/p>\n<\/blockquote>\n While investors keep an eye on the Fed and Treasury Dept\u2019s plan to prevent another banking crisis similar to last March as Bank<\/span> Term Funding Program bailouts (BTFP) end <\/span>in<\/span> March, macro builds pressure on Bitcoin.<\/span><\/p>\n The US 10-year Treasury yield is back above 4% after the jobs report. Currently, US10Y<\/a> is at 4.024% from 3.88% on Feb 2. Moreover, the US Dollar index (DXY<\/a>) surged to 104 on Friday, the highest in seven weeks, as traders lose confidence about expected rate cuts by the Federal Reserve in March.<\/p>\n <\/p>\n Bitcoin moves against Treasury yields and the US dollar. The macro could delay BTC price rally after the Bitcoin halving<\/a> amid rising macro pressure.<\/p>\n\n
Bitcoin Under Selling Pressure<\/h2>\n
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