Jobs report leaves rate odds flat
The report, released Friday morning, didn't materially boost the chances of a Fed rate hike. That's the key takeaway from the numbers, even as the market reaction suggested otherwise. For traders watching the central bank, the report was a non-event on the policy front. The odds of a hike stayed roughly where they were before the data hit the tape. That's a notable outcome, because jobs reports often move the needle on rate expectations. This one didn't.
Bitcoin's Friday slide
Bitcoin dropped on Friday, extending a rough week for the largest cryptocurrency. The move came despite the fact that the jobs report didn't change the rate outlook. That disconnect is worth noting, because crypto has been sensitive to rate expectations all year. When the Fed looks set to tighten, risk assets tend to struggle. But with the rate path unchanged, the selloff looks more like a reflex than a reasoned response. The move was broad, with the entire crypto market feeling the pressure, though Bitcoin led the way down.
Treasury yields climb anyway
Treasury yields rose on Friday, a classic hawkish response to strong jobs data. But the data wasn't strong enough to move the Fed's needle. The yield move looks like a knee-jerk reaction rather than a fundamental repricing of policy. Yields and rate expectations usually move together, but Friday they diverged. The rise in yields was enough to catch attention, but it didn't come with a corresponding shift in what the market expects from the Fed.
The overdone reaction
Put it together, and the market's hawkish lean appears overdone. The jobs report
