It was a day of positive divergence for crypto bulls as stocks tumbled late in the U.S. trading session while bitcoin {{BTC}} managed to erase most of the week’s losses.
In late afternoon action, the S&P 500 and Nasdaq were each lower by nearly 1% – not a huge loss, but about a 2% reversal off of earlier session highs. Behind the moves lower were hawkish comments from Minneapolis Fed President Neel Kashkari.
“If we continue to see inflation moving sideways, then that would make me question whether we [need] to do those rate cuts at all,” said Kashkari at a virtual event on LinkedIn. Kashkari has been among the more hawkish Fed members this cycle so his remarks shouldn’t have been too unexpected, but stocks quickly reacted to the downside. His comments were also at odds with those yesterday from Fed Chairman Jerome Powell, who told an audience at Stanford that he continues to expect rate cuts at some point this year.
Nevertheless, the rate outlook could come more clearly into focus on Friday with the release of the government’s March employment data. To date, those hoping weakening jobs numbers might prompt the Fed to move more quickly to a rate cut cycle have been disappointed, with employment growth maintaining robust levels throughout 2023 and so far in 2024.
Economist estimates are for 200,000 jobs to have been added in March, a strong number, though down from 275,000 in February. The unemployment rate is expected to hold steady at 3.9%.
Bitcoin, which had slipped as low as $65,000 overnight, rallied throughout much of the U.S. day, at one point topping $69,000. At press time, the crypto was trading at $68,750, up 4.5% over the past 24 hours. The broader CoinDesk 20 Index was ahead 3.25% over the same period, with ether {{ETH}} a notable laggard, up just 1.75%.