Crypto Market Eyes US Job Data But JPMorgan Focuses on CPI for Fed Rate Hike Decision

The crypto market has retreated today, indicating that investors are treading cautiously ahead of the major economic data releases in the coming days. For context, US job data is scheduled this week, followed by the US CPI and PPI inflation data next week, which might provide insights on the potential Fed rate move ahead.

Notably, JPMorgan said that while US nonfarm payroll data will play a key role, the US CPI will further cement bets on the next move of the central bank. With the Fed rate hike fears looming, the broader financial market is eagerly waiting for the upcoming release for further insights.

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Crypto Market US Job Data, Here’s What to Expect

According to market commentator Walter Bloomberg, JPMorgan sees monthly US job creation between 30,000 and 70,000 as the “sweet spot” for the upcoming payrolls data. The bank’s forecast has caught the crypto market attention, as investors are currently trying to navigate between a cooling labor market and persistent inflation risks.

Meanwhile, if hiring comes in significantly stronger than that range, markets could interpret the data as a sign that the US economy remains resilient despite higher inflation. Higher employment could support consumer spending and potentially add to inflationary pressures, pushing Treasury yields higher.

That scenario could weigh on risk assets, including the crypto market, as it could give more space to the US Fed for a rate hike. Notably, Wall Street now expects 53,000 new US jobs in August, up from a decline of 23,000 in the previous month. On the other hand, the unemployment rate is expected to remain unchanged at 4.1%.

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JPMorgan Prioritizes US CPI Ahead of September Fed Rate Decision

Walter Bloomberg’s X post also showed that JPMorgan believes that the upcoming US CPI would be more crucial than the US job data this week. Considering that, it appears that while the US nonfarm payrolls data would provide some insights, the crypto market would keep track of the US inflation data more for the upcoming Fed rate hike move.

Meanwhile, the market is already pricing in a potential Fed rate hike in September. According to CME FedWatch Tool, the odds of a likely rate hike now sits at 64.2%, suggesting that the Fed may turn hawkish with their monetary policy plans to curb the inflation. Besides, the investors can also check the odds on prediction markets here for a potential rate hike in 2026.

In addition, the recent remarks from Fed Chair Kevin Warsh and Governor Michael Barr has further cemented bets over a likely rate hike in September. This has weighed on the crypto market sentiment, while also impacting crypto stocks recently.

Considering that, it appears that investors are now treading cautiously, while waiting for the upcoming major US events in the coming days. While softer US Job and inflation figures might allay some concerns, hotter-than-anticipated data might trigger further downside risks for risk-bet assets like cryptocurrencies.

Meanwhile, to financialize these macroeconomic forecasts, US-based investors are increasingly turning to the best regulated prediction markets US to trade interest rate and economic policy contracts.