The Probability of the Fed Cutting Rates Reaches 99% — What Does It Mean for the Crypto Market?

U.S. non-farm employment data surprised to the downside this week, and Wall Street immediately increased its bets on a Fed rate cut. The most surprising part: the dollar remained strong despite the poor economic news.

The key point: Fed analysts believe that the employment figures have almost solidified the certainty of a rate cut this month. Investors are catching on: the probability of a cut at the upcoming meeting has already risen to 99%.

But not everything is so bullish for easy money:

Service sector inflation has recently picked up, which worries the Fed more than tariffs. Cleveland Fed’s real-time model projects:

• Overall CPI for August: +0.1 percentage points to 2.8%
• Core CPI for August: remains at 3.1%

Upcoming key events this week:

• Monday 23:00 UTC+8: Expectations for the New York Fed’s 1-year inflation outlook
• Wednesday 20:30 UTC+8: August PPI data ( unexpectedly rises, investors may temper their optimism )
• Thursday 20:30 UTC+8: August CPI and initial unemployment claims
• Friday 22:00 UTC+8: Michigan Consumer Sentiment Index

Crypto reality: Lower interest rates usually mean more liquidity seeking returns in risk assets. But if service inflation accelerates, the Fed might become more cautious. Keep an eye on those PPI and CPI data.