Jobs Data Crushes Estimates, Markets Rethink Fed Predictions

Both cryptocurrency and equities markets slipped on hotter-than-expected jobs data on Friday, before quickly recovering

article-image

Federal Reserve Chair Jerome Powell

share

Friday’s jobs data showed the economy added far more jobs than analysts expected, putting the unemployment rate at its lowest in more than 50 years.

It sent markets into a frenzy trying to decipher what this means for interest rates. 

Markets slipped on the news initially before recovering later in the trading session. The S&P 500 and Nasdaq Composite indexes each lost around 1% before paring losses to around 0.3% each as of 10:30 am in New York. Cryptos also bounced back to the green, with bitcoin (BTC) and ether (ETH) trading about 0.6% and 1.4% higher, respectively. 

The Federal Reserve opted to increase interest rates a quarter of a percentage point Wednesday, noting that “peak employment” was still a top priority for the central bank. The market remains tight though, with the number of posted jobs per unemployed worker rising yet again in December, according to data from the Bureau of Labor Statistics. 

“The past year the biggest risk to markets heading into each jobs report was that it would print ‘Too Hot’ and cause the Fed to hike rates even more than before and get more hawkish in its language,” Tom Essaye, founder of Sevens Report Research, wrote in a note ahead of Friday’s labor data release. 

Markets were still pricing in an almost certain likelihood that the Fed would go for another 25 basis point interest rate increase in March, according to CME Group data

“But given Powell did not push back on the market’s expectations for just one more rate hike and two-to-three rate cuts in late 2023, it implies that the labor market is not as big a hawkish risk as it seemed because there’s been little progress on restoring balance in the labor market (the balance the Fed stated it desired),” Essaye added. 

Coming off of an exceptional month for asset performance across the board, analysts are speculating how long cryptos can sustain their run. Bitcoin still has not managed to break the $24,000 level while ether continues to flirt around $1,600. 

“January was a robust month for crypto and the FOMC decision helped keep all risky assets going higher,” Edward Moya, senior market analyst at Oanda, said.

“Bitcoin is rallying as the post-Fed rally holds and global bond yields extend their declines. Bitcoin is riding this risk-on mood from Wall Street, but it might struggle to break above massive resistance from the $25,000 level.” 


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

    Upcoming Events

    Industry City | Brooklyn, NY

    TUES - THURS, JUNE 24 - 26, 2025

    Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

    Old Billingsgate

    Mon - Wed, October 13 - 15, 2025

    Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

    recent research

    Research Report Templates.jpg

    Research

    Bluefin possibly stands at an inflection point. The token is near an all-time low yet the protocol’s spot volume market share and derivatives exchange usage have been increasing month over month since its November launch. Given its current market position and the upcoming upgrades (for both Bluefin and SUI), there may be upside potential before the increased supply growth in December. However, strong opposition from existing competitors (like Cetus and Suilend), as well as new entrants (like Aftermath), pose key challenges to Bluefin’s medium-term success.

    article-image

    What Grayscale’s watching going into the second quarter and why crypto had a rough start to the year

    article-image

    Sol’s price drop was partially triggered by one of the year’s more chaotic memecoin events

    article-image

    Are digital assets just part of “normal” finance conversations now?

    article-image

    It’s a busy week as DC prepares for confirmations and policies that may have major impacts on crypto

    article-image

    NFT collection Azuki is releasing anime-inspired decks for a physical trading card game

    article-image

    Fidelity is planning a stablecoin launch, FT reports, as more companies flock to the digital-dollar business