Bitcoin News Today: Fed Rate Cut Bets Rise as Jobs Market Struggles to Gain Traction

U.S. August Payroll data released by the Bureau of Labor Statistics on Friday showed weaker-than-expected growth, with nonfarm payrolls increasing by just 22,000, significantly below the market forecast of 75,000. This marked a notable decline compared to the 79,000 (revised from 73,000) reported in July. The unemployment rate rose to 4.3% in August, in line with expectations, up from 4.2% in the prior month. Meanwhile, average hourly earnings grew by 0.3% month-over-month, matching forecasts [3]. The underwhelming performance of the labor market has intensified market expectations for a rate cut by the U.S. Federal Reserve, particularly at the upcoming September policy meeting.

The CME FedWatch tool now shows a 92% probability of a 25-basis-point rate cut in September, up from 86% a week earlier, with speculation also rising about the possibility of a larger 50-basis-point cut. The weaker jobs data has raised concerns about the pace of economic growth, with investors increasingly pricing in aggressive monetary easing from the Fed. This trend has been reflected in the foreign exchange market, where the EUR/USD pair has remained above 1.1700, as the U.S. Dollar faces pressure amid these expectations [3]. The dollar’s decline has been reinforced by heightened concerns over a slowing economy, further reinforcing the market’s anticipation of Fed policy action.

The broader labor market also showed signs of strain. A wider measure of unemployment, which includes discouraged workers and those holding part-time jobs for economic reasons, rose to 8.1% in August—a 0.2 percentage point increase and the highest level since October 2021. This figure reflects growing labor market challenges, particularly as the post-pandemic recovery has slowed and hiring activity has cooled. The Bureau of Labor Statistics also announced its plans to release the initial estimate for annual benchmark revisions to employment data dating back one year from March 2025, a process that has previously drawn criticism for introducing uncertainty into the final figures [1].

The timing and accuracy of employment data have become a contentious issue, particularly in the post-Covid era, as declining survey response rates—especially for the establishment survey—have raised concerns about the reliability of the initial estimates. These revisions often lead to significant adjustments in the final numbers, with past August data typically revised downward in the three years prior to this report. National Economic Council Director Kevin Hassett has expressed expectations that the August payrolls count could be revised upward, though this remains to be confirmed as more data becomes available [1].

As the market awaits the Fed’s next move, the economic landscape remains closely watched. The European Central Bank (ECB) is expected to maintain its current interest rate policy at its upcoming meeting, as inflation in the Eurozone remains near its target and economic growth remains steady. The contrast between the Fed’s anticipated rate cuts and the ECB’s expected policy inaction is likely to continue influencing the EUR/USD exchange rate and global capital flows [3].

The U.S. labor market’s slowdown, combined with elevated inflation concerns, has created a complex environment for policymakers. While the Fed appears to be leaning toward easing, key officials, including Federal Reserve Bank of Chicago President Austan Goolsbee, have expressed caution. Goolsbee stated he is still uncertain whether September is the appropriate time for a rate cut, given the mixed signals from the data. This uncertainty underscores the challenges the Fed faces in balancing inflation control with the need to support a cooling economy [3].

Source:

[1] Jobs report August 2025 (https://www.cnbc.com/2025/09/05/jobs-report-august-2025.html)

[2] Bitcoin (BTC) Price Prediction: Bitcoin Eyes $200K Rally ... (https://bravenewcoin.com/insights/bitcoin-btc-price-prediction-bitcoin-eyes-200k-rally-after-rebounding-strongly-from-110k-support)

[3] EUR/USD remains above 1.1700 amid rising Fed rate cut ... (https://www.fxstreet.com/news/eur-usd-remains-above-11700-amid-rising-fed-rate-cut-bets-202509080115)

[4] EUR/USD remains above 1.1700 amid rising Fed rate cut ... (https://www.mitrade.com/insights/forex-analysis/eur/fxstreet-EURUSD-202509080930)