Employment Data Cools Down—Is the Fed Really Going to Cut Rates Again?

BlackRock’s recent assessment is quite interesting: the U.S. labor market is clearly cooling off. Companies are neither aggressively hiring nor conducting large-scale layoffs—it’s just stagnating. In this situation, the probability of another Fed rate cut in December is rising.

Although inflation hasn’t fully returned to the 2% target, the weakness in the job market has become a variable that can’t be ignored. The market generally expects a 25 basis point rate cut next week. More importantly, BlackRock believes this trend could continue until 2026—in other words, the rate-cutting cycle may have only just begun.

However, there’s a minor twist. Due to the U.S. government shutdown, the employment reports for October and November will be delayed until December 16. The data may be late, but it hasn’t dampened the market’s enthusiasm for easing expectations.

Of course, some caution is warranted: if the economy unexpectedly rebounds next year and inflation rises again, long-term U.S. Treasury yields could become volatile once more. BlackRock has quietly adjusted its rating for long-term Treasuries to neutral, sending a clear message—don’t get too aggressive; flexibility is key.

For the crypto market, heightened liquidity expectations could be a good signal. Major coins like BTC and ETH have historically been quite sensitive to Fed policy shifts. Rate cuts mean lower capital costs, and risk assets could see renewed attention.