The hotter the employment, the more urgent the rate cuts, and the more cryptocurrencies fall? What is the market betting on?

The same “blowout” non-farm payroll report is seen by traders as solid evidence of delaying rate cuts, while in Trump’s view it signals “America is strong, so interest rates must be at their lowest.” Meanwhile, the Federal Reserve in the middle is staging a rare scene—an outgoing board member’s solitary opposition to colleagues.

On February 11, Washington time, the January non-farm payrolls came in with 130,000 new jobs and the unemployment rate dropped to 4.3%. Logically, an overheating economy should dampen expectations for rate cuts. But the White House’s conclusion was exactly the opposite: because the data is good, rate cuts should be accelerated.

This isn’t a disagreement in economics; it’s a microcosm of the misalignment between the power cycle and the policy cycle. On the other side of the ocean, on trading screens, Bitcoin responded with profound meaning—first crashing, then rallying, completing a full bull-bear trap within 24 hours.

1. The “Two Faces” of Non-Farm Payrolls: Traders See Hawks, White House Sees Doves

Looking solely at the headline figure, 130,000 far exceeds the expected 55,000. But a closer look reveals a less clean picture:

● First, structural imbalance is severe. Healthcare and social assistance contributed 122,000 jobs, nearly all the growth; federal government employment decreased by 34,000, reflecting the “delayed resignation plan” implemented after Trump’s election. Actual private sector demand for labor is far weaker than the headline suggests.

● Second, the annual revisions are selectively ignored. The 2025 employment total was sharply revised downward by 862,000, from 584,000 to 181,000—meaning last year’s hiring was minimal. The January rebound looks more like a slight bounce at the bottom rather than a true takeoff.

● But the market ignores these details. CME FedWatch shows the probability of no rate change in March rising from 79.9% to 94.1%, and the chance of no rate cut in June jumping from 24.8% to 41.1%. Bets on Polymarket are even more extreme, with traders nearly giving up hope for a June rate cut.

Strangely, the White House is completely unfazed.

● Trump’s statement on Truth Social is worth noting. He didn’t mention “inflation is under control,” nor did he criticize Powell as usual. Instead, he framed rate cuts as a national privilege—“We are the world’s number one, so we should pay the lowest interest rates.”

● This is a de-technicalized narrative. Simplifying complex rate decisions to “a strong country deserves low costs” sidesteps the Fed’s independence and ignores stubborn service-sector inflation.

● But what truly catches the market’s attention isn’t Trump’s post but the outgoing Fed governor Stephen Miran.

2. Miran’s “Final Resistance”: Rare Logic from a Supply-Side Dove

Stephen Miran is a unique figure.

● Since joining the Fed Board in September 2025, he has consistently voted against the majority—not opposing rate cuts per se, but opposing their slow pace and conservatism. At the January FOMC meeting, colleagues agreed to hold steady, with only Miran and Waller advocating for a 25 basis point cut.

● His term ended on January 31. According to protocol, he could stay until his successor is confirmed, but everyone knows Trump has nominated Kevin Warsh to take his seat.

But Miran didn’t stay silent.

In response to questions like “Why cut rates when non-farm payrolls are so strong?” his reply was threefold, each challenging the traditional Fed framework:

● First: Strong employment ≠ need to tighten. Miran believes the U.S. economy, without triggering inflation, still has the potential to absorb about a million new jobs. The labor market isn’t “overheated,” but rather “recovering from the edge of a cliff.” Rate cuts now aren’t adding fuel to the fire—they’re providing insurance against policy lag effects causing unexpected contraction.

● Second: Supply-side reforms are rewriting the lower bound of rates. This is Miran’s core and most controversial point. He argues that deregulation, early retirement plans, and reductions in government employees (down 360,000) are boosting total factor productivity. If the supply side can grow faster, the demand-side interest rates shouldn’t be held back. In other words, for the same economic growth, the nominal rate needed now is lower than before.

● Third: Housing inflation is coming down, and tariffs aren’t as scary. Miran’s inflation estimate is more optimistic than his colleagues’. He judges current core inflation at about 2.3%, within the 2% target range, with lagged effects from housing about to be released. As for tariffs, he considers them “relatively minor” factors with no signs of widespread transmission.

This “supply-driven rate cut space” logic is a minority view within the Fed. Most policymakers are reluctant to base short-term policy on long-term productivity—what if productivity doesn’t materialize, and inflation returns first?

But Miran’s statements are important not because they can change January or March decisions, but because they represent an attempt by the White House to embed a new narrative into the Fed. Once Waller takes over, this logic could shift from “personal dissent” to “chairman’s tone.”

3. Market Pricing’s “Split Personality”: How Much Is Left in the June Window?

Traders are honest—they don’t follow political slogans.

● After the non-farm data, short-term interest rate futures were sold off. The probability of a rate cut in June, once considered a certainty, has become a 50-50 chance, with the likelihood of action before April dropping below 20%. JPMorgan and Wells Fargo’s research reports are unusually aligned: this data makes the chance of a rate cut in the first half of the year increasingly unlikely.

● But the market’s “hawkish pricing” isn’t complete. The 10-year Treasury yield only rose slightly by 2.77 basis points, closing at 4.17%. This restrained move indicates no bets on a rate hike cycle restarting. The major US stock indices closed lower, but declines were within 0.2%, with the S&P 500 nearly flat.

● This reflects a “delayed but not absent” rate cut expectation. No one believes the Fed will tighten; they’re just betting whether the first cut will be in June or July, and whether there will be one or two cuts this year. Amid this somewhat dull macro landscape, crypto markets are showing a very different intensity.

4. Crypto Market’s “Preemptive Guess”: Rebound from the Crash

● On the evening of February 11, within an hour of the non-farm release, Bitcoin dropped below $66,000, with a 24-hour decline exceeding 5%. This move aligned with US stocks’ opening but was far more severe than the Nasdaq’s 0.16% dip. Less liquid assets are more sensitive to rate expectations—this pattern remains valid.

● After midnight in GMT+8, Bitcoin rebounded from a low of $65,984, quickly surpassing $67,000, recouping more than half of its intraday loss. By early morning, it was around $67,035, bouncing over $1,000 from the bottom.

● This “sharp drop, then deep V” pattern is typical of speculative buy-ins. Some are betting the market overreacted to the non-farm data, expecting traders to reprice after cooling off.

● Fairly, this non-farm report isn’t enough to justify long-term high real interest rates. The 4.3% unemployment rate remains historically low, but total employment is over three million below pre-pandemic levels, and labor force recovery is painfully slow. Excluding the one-off government layoffs from deregulation, endogenous momentum isn’t strong.

● Crypto markets have never followed macro data directly but rather “pre-guess” macro expectations. The crash obeys immediate sentiment, while the rally prices in the Fed’s forced dovish turn in the second half of the year.

5. Positions and Tenure: The Hidden Variables Shaping the 2026 Rate Path

● One person cannot be ignored: Kevin Warsh. Trump has explicitly nominated Warsh to replace Miran, and he is expected to be confirmed after Powell’s term ends in May. The market stereotypes Warsh as hawkish—he’s known for his anti-inflation stance during his previous Fed tenure.

● But a closer look shows the macro environment Warsh faces has drastically changed. In 2018, he dealt with a cycle of tax hikes and capacity utilization; in 2026, he faces deregulation and productivity pulses. Recent private statements acknowledge that productivity improvements could alter the long-term neutral rate estimates.

● Warsh’s real challenge isn’t left or right stance but whether to adopt Miran’s “supply-side rate cut logic.” Refusing to do so would conflict with White House expectations; fully embracing it would mean a fundamental shift in the Fed’s policy framework.

● There’s also a subtler institutional issue: Powell’s Fed governor seat expires in January 2028. If Powell remains as Chair after May, holding onto his governor seat would create a “former Chair and new Chair” coexistence—an extremely rare scenario in Fed history.

● Miran’s comment in an interview, “I’d be happy to stay, but it’s not up to me,” subtly expresses uncertainty about this personnel shuffle. Even if he wants to stay and continue fighting as a dove, the vacancy’s physical existence isn’t subject to personal will.

When economic data doesn’t support rate cuts but policymakers are determined to cut, whom should the market listen to? The past fifteen years’ answer was “the Fed.” But this year, the White House is trying to change that answer.

Trump’s second term policy pace has clearly accelerated. Deregulation, spending cuts, and capacity expansion—these supply-side measures, if implemented faster, erode the Fed’s justification for high rates. Even if inflation remains sticky, real rates are already too high.

Bitcoin’s rapid rebound after the crash is a tentative acknowledgment of this logic—funds are seeking an escape route. It may not be correct, but it reflects urgent search for alternatives.

As for Miran, the “shortest-lived” dove on the Fed, he has completed his final lonely dissent votes in his countdown. His policy ideas didn’t win colleagues over, but his thinking is winning the White House. The real showdown in Washington will be in May.