Fed Rate Cut Odds Climb Following Weak Jobless Claims Data

The odds of a Fed rate cut at the March FOMC meeting have spiked following the release of the weekly jobless claims and JOLTS job openings data today. The job report signaled that the labor market remains, which strengthens the case for the Fed to lower rates, a development that could be positive for Bitcoin and the broader crypto market.

Fed Rate Cut Odds Rise On Weak Jobs Report

CME FedWatch data now shows an 18% chance of the Fed lowering rates by 25 basis points (bps) at the March FOMC meeting. This represents a significant increase from earlier this week when the odds were at 10%.

The rise in the Fed rate cut odds comes amid the release of the jobless claims data for last week. According to the Department of Labor, the initial claims for the week ending January 31 were 231,000, above expectations of 212,000 and the 209,000 recorded the previous week. Meanwhile, the December JOLTS job openings came in at 6.5 million, below estimates of 7.2 million.

This again signals that the labor market remains weak, although economists pointed to the harsh weather conditions as the reason for this significant increase. Notably, the Fed has paused rate cuts at last week’s FOMC meeting, noting that the labor market appears to be stabilizing after the three cuts they made last year, while inflation remains somewhat elevated.

As CoinGape reported, Federal Reserve President Tom Barkin signaled this week that he might oppose further Fed rate cuts for now as they focus on bringing inflation to their 2% target. This echoed Fed Chair Jerome Powell’s remarks at the post-FOMC conference.

However, Fed Governor Chris Waller, who dissented in favor of a 25 bps cut at the FOMC meeting, stated that the labor market remains weak despite recent data signaling a rebound. He cited 2025 data, noting it doesn’t show signs of a healthy labor market compared with data from the past 10 years.

More Focus On The January Jobs Report

The market will likely pay closer attention to the January jobs report, which could provide further insight into the state of the labor market and whether there is any chance of a Fed rate cut in March. The U.S. Bureau of Labor Statistics released a revised schedule showing it will release the nonfarm payrolls report and the unemployment rate on February 11, after delaying the report, originally scheduled for this Friday, due to the U.S. government shutdown.

It is worth noting that the ADP jobs report showed that private companies added only 22,000 jobs in January, well below expectations of 45,000. This was also below the downward revised version of 37,000 in December.

A potential Fed rate cut could be a boost for Bitcoin and the broader crypto market, which have crashed since last week’s FOMC decision. BTC recently dropped to as low as $69,000, its previous all-time high (ATH) during the 2021 bull cycle. The crash also coincides with Trump’s nomination of Kevin Warsh as the next Fed chair, raising concerns that the former Fed Governor may be hawkish. However, Trump stated that he wouldn’t have nominated Warsh if he