The US employment data suddenly poured cold water on the market.

Last week, initial jobless claims were reported at 208,000, below the market expectation of 210,000, and have remained at a low level over the past four weeks. Companies show no signs of slowing down hiring, and the unemployment rate stays around 3.7%. This scene hardly shows any signs of a recession.

But here’s the problem — strong employment data directly shattered the hope of rate cuts.

According to the latest data from CME FedWatch Tool, the probability of a 25 basis point rate cut in January is only 11.6%, almost negligible. The probability of holding rates steady is as high as 88.4%. Even looking ahead to March, the chance of a rate cut remains very slim. What does this mean? In the foreseeable future, the window for the Federal Reserve to loosen policy is basically closed.

**The impact on the crypto market is twofold.**

In the short term, this is a bearish signal. The previous expectation that rate cuts would drive liquidity into the market has been dashed, and the catalyst for new inflows of capital has disappeared. But from another perspective, the economy is so resilient that the risk of a hard landing has greatly decreased, and the probability of a soft landing has risen sharply. Compared to the pessimistic outlook of an economic recession, steady growth is actually a long-term positive for risk assets.

The key is to keep an eye on two indicators: employment and inflation. As long as these two data points do not show clear signs of softening, the Fed will continue to maintain a hawkish stance. In other words, the arrival of a rate cut cycle requires waiting for more definitive signals.

**Finally, a question: do you think there is still a possibility of rate cuts in the first half of the year? Will it be during a meeting in March, or June? Or do we have to wait until the second half?**