- Aussie analyst, Ted Talks Macro, has said strong US jobs data is likely to delay interest rate cuts, prolonging the crypto correction and creating an opportunity to accumulate.
- Ted also suggested the factors that have driven gold’s price higher recently, like US dollar debasement and higher inflation, will also see Bitcoin surge later this year.
Jobs Data May Delay US Rate Cuts, Says Analyst
According to Ted Talks Macro, the better-than-expected jobs data out of the US lowers the chances of an interest rate cut in the short-term. The jobs data, which was released last Friday US time, showed that unemployment had dropped from 3.9% to 3.8%, with over 300,000 new jobs being created, far more than the expected 200,000.
— ted (@tedtalksmacro) April 5, 2024Strong employment data today 🔥 Market slightly lower as it so badly wants rate cuts… likelihood of it getting them just decreased on these numbers. Unemployment 3.8% vs 3.9% prev. +303k jobs added vs +200k expected. Strong economy is good for risk longer term, this is a… https://t.co/5VGbtTgNLd
Generally when unemployment is low the Fed is less likely to reduce interest rates as more jobs means more money flowing into the economy and a rate cut could risk overheating things. A JPMorgan economist told Reuters that the urgency for the Fed to ease monetary policy had lessened, which saw the investment bank push back its call for the first rate cut from June to July. Some analysts have suggested rate cuts won’t happen until 2025. Ted said the probable delay created good conditions for smart money to accumulate while sentiment is temporarily low. In the longer term, he thinks the strong economy, along with other factors such as the Bitcoin halving and continued interest in the Bitcoin spot ETFs, will see a return to a bullish crypto market later this year. Not everyone agrees. An X user known as RedRocks Capital responded to Ted’s post saying that the market has still priced in three rate cuts this year and the predicted likelihood of a rate cut in June is still virtually the same as what it was before the jobs data was released:
Market pricing of cuts has not changed meaningfully on the news – we are still pricing in 3 cuts this year & a 56% chance of cut in June (from 60% before the report). I think we need to wait on CPI next Weds to confirm or push out the June rate cut.
— RedRocks Capital (@RedRocksCapital) April 5, 2024
Gold Price Performance Suggests Bitcoin Will Surge
Ted Talks Macro also suggests that gold’s recent price growth may indicate that Bitcoin will perform similarly later this year. According to Ted, Bitcoin and gold are generally highly correlated assets, but recently they’ve diverged as gold has surged higher while Bitcoin has pulled back. Related: ‘Rich Dad, Poor Dad’ Author: Don’t Wait to Invest in Bitcoin
He said the factors driving gold’s recent increase — debasement of the US dollar, higher inflation and a reduction in yields — will likely also eventually contribute to growth in Bitcoin’s price. The analyst also said the upcoming halving and the new ETFs will be important drivers of Bitcoin’s price appreciation:
Often times you’ll see these divergences between highly correlated assets for various reasons, it could be trader positioning (which I think is the case here for BTC) but the underlying notion is that both have all reasons to move higher this year. Lower yields, higher inflation… and BTC has the halving + the ETF. I don’t think you should be bearish up here.
Ted Talks Macro
