Normally strong economic data would be welcome news. But in this case, it worked against risk assets. Stronger job growth reduces pressure on the Fed to cut rates, and markets quickly priced in a higher probability of a hike instead, according to Bull Theory. The reaction was swift as $835 billion was wiped out from gold, silver and crypto combined within 25 minutes of the data release.
Trump Calls the Reaction “Crazy”
President Trump weighed in directly on the market’s response, calling it “crazy” that stocks fell after a stronger-than-expected jobs report and describing the reaction as living in a “false reality.”
Trump also called on the Fed to cut interest rates regardless of the strong jobs data, and threatened to “stop trading with countries with which we have a deficit” if the central bank doesn’t act. “The Fed must get smart,” Trump said.
Zcash Bucks the Trend
While most of the market retreated, Zcash stood out with a 13% gain, pushing its price to $1,034.80, making it one of the few major tokens moving higher through the selloff.
Other Pressures Building
The jobs shock lands alongside separate inflationary pressure from energy markets. US national diesel prices hit a record $5.62 per gallon, surpassing the previous high from June 2022, with diesel inventories at a record low for this time of year amid the ongoing Iran war, according to Kobeissi.
What It Means
With the total crypto market cap still sitting at $2.75 trillion despite the pullback, today’s move shows how sensitive risk assets remain to Fed rate expectations, even when the underlying economic news is objectively strong. Whether this proves a short-lived reaction or the start of a deeper repricing may depend on how the Fed responds to both the stronger labor data and mounting political pressure from the White House.
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