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A surprisingly soft U.S. jobs report on August 1, 2025 destroyed the narrative of “resilient labor markets” President Jerome Powell defended just days ago .
📌 Here’s the breakdown:
July added just 73,000 jobs, down sharply from expectations of over 110,000 .
Prior months were significantly revised: 258,000 jobs erased from May and June data — suddenly those “strong” numbers disappeared .
Unemployment ticked up to 4.2%, matching forecasts but still pointing to labor weakness .
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🔄 Reaction: Markets Force Fed Policy Pivot
Fed credibility took a hit as Powell’s confidence was contradicted by the data .
Traders immediately recalibrated: September rate cut odds jumped to ~75–83% from around 40% just a day earlier .
Treasury yields plunged: the 10‑year yield fell over 10 bps to ~4.27% as investors adjusted future rate expectations .
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💬 Trump Jumps In: Political Drama Meets Economic Data
President Trump fired the Bureau of Labor Statistics chief Erika McEntarfer and accused her of manipulating job data — an unprecedented move that further rattled investor confidence in U.S. statistics .
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📉 What This Means for Crypto
Crypto markets are highly Fed-sensitive—so rate cut expectations = potential liquidity boost for Bitcoin & altcoins .
Bitcoin fell about 2.1%, Ethereum and others also dropped briefly on these macro shifts .
A weaker dollar also tends to support crypto demand, especially from retail and foreign investors .
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🧭 TL;DR for Crypto Investors
Weak jobs data = Fed may cut rates sooner than expected.
Confidence in Powell’s rhetoric has crumbled.
Crypto could benefit if rate hikes give way to easing.
Market uncertainty remains; near-term volatility likely.
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