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Wall street is abuzz with rumors of a downward revision to payroll growth by at least 600k. This would indicate that the US job market was not as robust as the market expected in the past year.

The question now is whether the Fed has been behind the curve. The Fed has delayed rate cuts due to a stronger-than-expected job market and robust economy.

We expect Powell to address this issue during the annual Jackson Hole event. However, we believe Powell will not commit to a decision given there is another month until the Fed’s Sep meeting.

A large downward revision, or an especially dovish Powell, could potentially reverse the 2-week equity rally and push BTC and ETH below support levels.

Regardless of the revision, the Fed seems poised to cut in September. The market is currently pricing in 3.7 cuts in 2024, and 4.5 cuts in 2025.

Trade Idea

Banks have already started to adjust their Fixed Deposit rates lower based on expectations of a rate cut cycle.

12-mth USD Fixed Deposits are paying 3.5 – 4.0% p.a. For the same tenor, you can lock in 9.5% p.a. in crypto cash and carry. This seems particularly attractive, especially if the Fed decides to embark on a much more aggressive cutting cycle.

IndexBasisAnnRate(%)Tenor28MAR253333.189.3921927JUN254776. 899.51310

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Disclosure: The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.