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Initial jobless claims in the United States fell sharply in the last week of December, reinforcing signs of labor market strength and complicating expectations for interest rate cuts in early 2026.
Initial claims for the week ending December 27 fell to 199,000, the lowest level since late November and well below expectations of 220,000. The previous week’s figure was also revised up to 215,000, making the recent decline the most pronounced.
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Strong labor market data delays expectations of Fed monetary policy easing
Data at the key level suggest that layoffs remain limited. Employers continue to retain workers despite slowing hiring and rising borrowing costs.
This supports the view that the US economy is gradually slowing rather than entering a recession.
As a result, the report weakens the arguments in favor of a rapid easing of monetary policy. A labor market that shows no significant pressure reduces the pressure on the Fed to act quickly, especially with… Inflation remains above target.
This development is closely aligned Minutes of the December Federal Open Market Committee meeting. Officials acknowledged that labor market conditions had softened slightly, but stressed that job losses had not accelerated significantly.
Several officials argued that “it is appropriate to keep the target range unchanged for some time” to evaluate future data.
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In addition, Inflation remains a major constraint. The lower claims point to continued wage stability, which could slow progress toward the Fed’s 2% inflation target, particularly in the services sector.
The minutes indicate that inflation It did not come close to the goal of 2% in the past yearwhich strengthens prudence.
Together, the data reduces the probability of a cut cut at the beginning of 2026. While the markets have already ruled out a move in January, the latest figures of the labor market make a cut in March less likely, unless there are clearer signs of slowing inflation.
The Fed seems more comfortable waiting than risking a first session of easing.
This situation poses a challenge to digital currency markets. Bitcoin continues to struggle to regain momentum in recent weeks as high interest rates continue to keep real yields high and liquidity tight.
The strong employment data removed one of the main arguments for accelerating policy easing.
Expect the short-term trend of crypto-currencies to be linked to macroeconomic data. Unless employment conditions deteriorate or inflation declines decisively, the Fed is likely to keep policies steady for most of the first quarter.
This situation may lead to continued pressure on risk assets in 2026.
