Bitcoin Rebounds Above $112K as Economists Downplay Recession Risks
10/9/2025
Cryptocurrencies and European equities rallied Wednesday as analysts dismissed fears of U.S. recession and stagflation following revised jobs data.
Bitcoin (BTC) reclaimed $112,000, trading near $113,745, while European stocks opened higher amid renewed investor optimism. The rally followed a U.S. Bureau of Labor Statistics (BLS) report revising job growth downward by 911,000 for the 12 months through March 2025.
Markets had relied on a strong labor market to sustain growth despite persistent inflation. Tuesday’s revision briefly spooked investors, pushing BTC from $113,000 to $110,800.
Some interpreted the revision as a recession warning. Michael Englund, chief economist at Action Economics, argued the data mainly reflects long-term labor force trends rather than immediate economic risks.
“Trend-growth for monthly payrolls is now likely in the tens of thousands rather than hundreds of thousands, with labor force growth projected at about 90,000 going forward,” Englund said. He noted that post-COVID labor force expansion, driven by roughly one million annual net migrants, has shifted to net out-migration of one to two million, implying slower employment growth ahead.
Markets have largely embraced this outlook. BTC rebounded above $112,000, while Ether (ETH), XRP, and Dogecoin (DOGE) recovered much of Tuesday’s losses. Solana (SOL) surged to $222, its highest since February 1. S&P 500 futures rose 0.3%, with European equities opening higher.
Stagflation Fears Seen as Overblown
Inflation remains near 3%, above the Fed’s 2% target, but analysts say stagflation concerns are exaggerated. Marc Chandler, chief market strategist at Bannockburn Global Forex, noted that U.S. GDP continues to run above the Fed’s non-inflationary trend.
“Inflation is slightly elevated, but the Fed is focused on temporary factors. Easing appears likely,” Chandler said.
Traders are pricing a 91% chance of a 25-basis-point Fed rate cut to 4% on Sept. 17, though some anticipate a 50-basis-point reduction.
Focus on Upcoming CPI and PPI
Markets will closely watch the Producer Price Index (PPI) on Wednesday and Consumer Price Index (CPI) on Thursday. Signs of easing inflation could further support risk assets, while stronger-than-expected readings may trigger volatility.
“If the market expects a 50-basis-point cut but only 25 are delivered, a sell-off could occur,” said Greg Magadini, director of derivatives at Amberdata.
