In brief
- Traders are reassessing the policy outlook without October’s inflation and employment figures.
- Bitcoin extended its weekly slide, with prediction markets marking down the odds of a near-term move toward further gains.
- Rate-cut expectations softened, with futures now implying even odds of a 25-basis-point move in December as analysts warn the Fed’s data gap raises the risk of missteps.
Bitcoin and the broader financial markets are flying blind after the White House confirmed October’s critical inflation and jobs data will likely not be released, creating a macro overhang and further complicating the Federal Reserve’s policy decisions this year.
“The Democrats may have permanently damaged the Federal Statistical system with October CPI and jobs reports likely never being released,” White House press secretary Karoline Leavitt reportedly said Wednesday, as cited by CNBC. “All of that economic data released will be permanently impaired, leaving our policymakers at the Fed flying blind at a critical period.”
The White House placed the blame squarely on the longest-running U.S. government shutdown in its 236-year history, after the Democrats argued for an extension to tax credits expiring at the end of the year that would lower costs for the millions of Americans relying on health coverage.
Late Wednesday, the House passed a bill to reopen the Federal government, following a Senate vote on Monday. That measure has now been signed by President Donald Trump.
Even so, the jobs data blackout has altered the broader market landscape, “amplifying the importance and uncertainty surrounding the next release, as it grants the data agency greater ‘maneuvering room,’” Adam Chu, chief researcher at GreeksLive, told Decrypt.
Bitcoin is down 1.1% over the past 24 hours and trading at $102,100, according to CoinGecko data, extending its 10% drop over the past week.
The rising uncertainty is also evident in prediction markets. Users on Myriad, owned by Decrypt’s parent company Dastan, have tempered their bullish expectations, with the chance of Bitcoin hitting $115,000 before $85,000 dropping from 61.4% to 58.8% in a day.
The move now casts doubt on a potential December interest rate cut, which analysts have previously highlighted as critical for shaping market expectations.
“December rate futures now price in a 50% probability of a 25-basis-point cut,” a significant drop from the previous market consensus, Chu noted.
Data paused, what’s next?
The confusion over October’s lost data has now flipped the script, creating a new set of challenges.
“In a data-vacuum environment, the primary impact on macro-sensitive assets such as Bitcoin is a sharp rise in uncertainty, which naturally increases volatility,” Tim Sun, senior researcher at HashKey, told Decrypt.
The analyst expects trading to become “sentiment-driven, making it difficult for the market to sustain strong upward momentum.”
It also puts Federal Reserve Chair Jerome Powell, who has often emphasized a data-driven approach, in a difficult position.
“The Fed is likely to shift into a risk-management posture,” Sun said, suggesting that “an overly hawkish stance could amplify vulnerabilities and raise the probability of a policy misstep.”
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