Bitcoin Sinks Below $80,000 as Strong Jobs Report Shifts Fed Policy Expectations

Bitcoin fell below $80,000 on September 4 after a stronger-than-expected August jobs report. The report showed nonfarm payrolls rose by 162,000 in August, more than five times the average monthly gain of 31,000 over the previous 12 months. This made it harder for the Federal Reserve to justify holding interest rates steady.

The jobs report also led to a rise in short-term yields and a firmer dollar. Two-year Treasury yields rose to near 4.40%, while the 10-year yield reached 4.80%. The dollar index touched 99.932 from about 99.035 before the data.

Fed Governor Christopher Waller stated that labor-market weakness alone could not justify a pause in policy, and that August inflation would heavily influence his September stance. He said he would consider holding the policy rate steady if progress toward the 2% inflation goal continued, but might hike rates if evidence of reversed progress emerged.

The payroll report removed obvious labor deterioration that could have outweighed an uncomfortable inflation print. The next major scheduled inflation test is the August consumer price index on September 11, which will be a crucial indicator for policymakers before their meeting on September 16.