BTC & ETH Update: Ethereum's Revival

Market Commentary

The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index, showed an uptick in October, rising 0.2% monthly with a 12-month rate of 2.3%, higher than September's 2.1%. Core inflation, excluding food and energy, demonstrated stronger momentum at 0.3% monthly and 2.8% annually. Services and housing costs drove most of the inflation, each with a 0.4% increase, while goods prices declined 0.1%. Despite inflation remaining above the Fed's 2% target since March 2021, market participants increased their expectations for a December rate cut, with odds reaching 62%. The Fed's recent consecutive rate cuts in September and November, totaling 0.75 percentage points, reflect growing confidence in inflation's trajectory toward the 2% target, though officials are maintaining a cautious approach to future rate reductions.

With inflation concerns seemingly behind us, the focus has shifted to the economy’s health and despite numerous imperfections in the US economy, 2024 has been marked by remarkable economic resilience and robust expansion. The latest economic data for November 2024 reveals a moderating but resilient U.S. economy. The third quarter GDP grew at an annualized rate of 2.8%, slightly below the second quarter's 3.0% growth. 

In the labor market, October saw a significant slowdown with only 12K new jobs added, though economists are forecasting a recovery to approximately 200K new jobs for November. Meanwhile, the unemployment rate has remained steady at 4.1%, showing little movement in recent months. Sector-specific performance has been mixed, with healthcare adding 52K jobs and government employment increasing by 40K positions, while manufacturing and temporary employment each experienced declines of about 50K jobs. Below we show the three-month rolling average change in nonfarm payrolls.