Jobs report cools Fed rate cuts bets as Treasury yields jump
The latest jobs report is complicating expectations for Fed rate cuts. U.S. employment added 130,000 jobs, while the unemployment rate held at 4.3%. At the same time, Treasury yields rose sharply—up 48 bps to 4.41%—signaling less urgency for easing.
Traders are recalibrating rate-cut probabilities for the June 2025 FOMC meeting. Rising Treasury yields and a strong labor market suggest Fed rate cuts may be unlikely soon, dampening enthusiasm for a June cut. Oil prices are also above $100 per barrel, and Middle East tensions add upside risk to inflation, further complicating any decision to loosen policy.
In the prediction market described in the article, trading activity in the Fed Rate Decisions market appears very light, implying a wait-and-see posture. With YES shares priced low, a bet on Fed rate cuts would likely require a meaningful deterioration in economic indicators or a clearly dovish signal from Fed Chair Jerome Powell.
Traders are expected to watch upcoming Fed speeches, Powell’s next testimony, any changes in FOMC minutes, and broader economic data. They will also look for shifts in the Treasury yield curve as potential signals for the next move in Fed rate cuts expectations.
Bearish
The news is broadly bearish for crypto because it pushes rate-cut timing further out. A hotter/steady labor market (130,000 jobs; unemployment 4.3%) and a sharp jump in Treasury yields (48 bps to 4.41%) typically tighten financial conditions. That makes discount rates higher and risk appetite lower—historically a headwind for Bitcoin and other high-beta assets.
This resembles prior episodes where strong labor prints or sticky growth reduced the market’s Fed rate cut odds, leading to yield expansion and a softer risk-asset tape. In the short term, traders often respond by de-risking and selling when yields rise and “Fed rate cuts” expectations slide. In the medium term, if inflation risks remain (oil > $100 and geopolitical tension), the Fed may stay restrictive longer, which can keep crypto under pressure until either yields cool or policy guidance turns clearly dovish.
However, the article suggests very light prediction-market volume, implying uncertainty rather than a decisive repositioning. That can limit immediate volatility, but the directionality (less likely Fed rate cuts) still leans risk-off, so the overall expected impact is bearish.