PANews reported on March 10 that according to The Block, the weaker-than-expected U.S. February employment report released last Friday strengthened the Federal Reserve's case for a rate cut, which could boost risk appetite and push up global stocks and assets such as cryptocurrencies. However, analysts said that the continued inflation risks associated with tariffs and supply chain disruptions may keep the Fed cautious. According to seasonally adjusted data from the U.S. Department of Labor, the U.S. economy added only 151,000 non-farm jobs from January to February, the weakest February growth since 2019. The figure was lower than the 170,000 net new jobs forecast by economists surveyed by Dow Jones. An analyst at Nexo said that several factors could suppress job growth in the coming months, including government layoffs, reduced federal funding, tariff uncertainty, and stricter immigration policies. "These factors could lead to a slowdown in hiring, dampen overall economic momentum, and could strengthen deflationary trends," said the Nexo analyst.
The analyst noted that the Fed now faces a difficult policy environment. While weaker job growth supports the case for rate cuts, persistent inflation concerns - especially those stemming from supply-side constraints and geopolitical uncertainty - may prompt the Fed to act cautiously, and the uncertain environment may weigh on the cryptocurrency industry. "In the cryptocurrency market, macroeconomic uncertainty remains the main driver of volatility," said Nexo analysts. "An economic slowdown and a dovish Fed could stimulate risk appetite, benefiting Bitcoin and digital assets. However, continued inflation or fiscal instability could offset these gains, keeping investors wary." CoinPanel trading automation expert Kirill Kretov highlighted the potential impact of rising unemployment on digital assets, as it increases the likelihood of a Fed rate cut, thereby improving liquidity for Bitcoin and decentralized finance. "Slightly weaker wage growth suggests that inflationary pressures have eased, making it more likely that the Fed will turn sooner," said Kretov.
