US Jobless Claims Drop Sharply, Fed Rate Cuts Look Less Urgent

US initial jobless claims for the week ending December 27 dropped unexpectedly to 199,000, significantly below the 220,000 forecast, indicating continued labor market resilience with limited layoffs. This strong data weakens the case for the Federal Reserve to enact rapid monetary easing, as employers are retaining workers despite higher borrowing costs. This aligns with recent FOMC minutes, where policymakers noted that while conditions softened, job losses had not accelerated meaningfully, suggesting rates should remain unchanged for some time. With inflation still above the Fed's 2% target, low jobless claims suggest wage stability that could slow disinflation progress, reinforcing the central bank's cautious stance. Consequently, the data reduces the likelihood of rate cuts in early 2026, potentially keeping pressure on risk assets like Bitcoin as the Fed is likely to stay on hold through much of the first quarter.

(Source：BeInCrypto)