A blowout U.S. August jobs report raised market bets on a September Federal Reserve rate hike and sent Bitcoin below $80,000.
Data released Friday by the U.S. Bureau of Labor Statistics showed nonfarm payrolls rose by 162,000 in August, far above the 53,000 to 56,000 range the market had expected. The report says the figure was also above every estimate in a Bloomberg survey of economists.
Jobs data pushes rate-hike expectations higher
Other parts of the report also pointed to labor-market strength. The unemployment rate held at 4.1%, unchanged from the previous month. Labor-force participation rose to 61.6%, which the report translated into about 300,000 people re-entering the labor market, while average hourly earnings increased 3.1% from a year earlier.
The article also noted that Black unemployment had fallen back to 6% after reaching 8% at one point last autumn. With prior months revised higher as well, the report described the payroll release as having few weak spots.
Interest-rate futures moved quickly. According to CME FedWatch cited in the article, the probability of a September rate hike was in a 49.4% to 55% range before the data and jumped to around 60% right after the release.
Trump tells the Fed to cut rates
The report said that when Donald Trump nominated Kevin Warsh to lead the Fed in February 2026, he had warned: 「If he had come in and told me, ‘I want to raise rates,’ he would not have gotten the job. Absolutely not.」 More than half a year later, however, Warsh is now described as being in the camp that supports higher rates.
On the day the employment data was released, Trump posted on Truth Social: 「The just-released jobs numbers are very strong and beat all estimates.」 He then turned to the Fed, saying: 「The Federal Reserve Board, and its great new leader, must get smart and be a patriot this time.」
Trump also said high interest rates put the United States at a 「very unfair disadvantage」 and added that 「a strong country should have low interest rates.」 He warned that if the Fed did not cut rates, he would stop doing business with all countries that run trade surpluses against the United States.
According to the article, Trump later told reporters in the Oval Office that he had 「no obligation」 to allow trade to exist. He said he could potentially ban all trade with Canada, named Mexico and the European Union over trade imbalances, and claimed a trade embargo could be imposed with 「one signature」 and that the Supreme Court had recently confirmed the president has that trade authority.
Warsh had already laid out a hawkish view at Jackson Hole
The article said Warsh had signaled his stance earlier, during a speech at the Jackson Hole symposium on Aug. 28. He said: 「We need to be confident that underlying inflation is moving toward our target clearly and at a sufficient pace. Otherwise, we still have work to do.」
Speaking about recent inflation reports, he added: 「They have not told me that the underlying trend has materially improved.」 The data he cited showed the Fed’s preferred inflation gauge was 3.7% in July, while 54% of tracked items had risen more than 3% over the past year, well above the 2% target. The report said Warsh even argued that current rates were 「not truly restricting economic activity.」
Next week’s CPI and PPI are the next focus
The article said the Fed is not unified internally. Governor Christopher Waller said that if next week’s Producer Price Index and Consumer Price Index show price pressures continue to ease, he would support holding rates steady at 3.50% to 3.75%.
Bitcoin falls below $80,000 as broader markets react
Crypto markets came under pressure on the night of the payroll release, with Bitcoin quickly dropping below $80,000. U.S. stocks also closed mixed to lower the same day: the Dow Jones Industrial Average fell 226 points, the S&P 500 lost 0.2%, and the Nasdaq added 0.1%.
Treasury yields moved higher, while gold fell to $4,380 per ounce.