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A stronger-than-expected May jobs report has upended the rate-cut consensus, sending Bitcoin and gold lower in tandem as traders repriced the Federal Reserve's policy path. Goldman Sachs now expects the Fed to hold rates through all of 2026 and delay cuts until June and December 2027 — a dramatic shift from the near-term easing that markets had been pricing just weeks ago.
Why it matters
The macro pivot is stark. Two weeks ago the debate was about when cuts would begin; today the market is pricing a 75.5% probability of rate hikes before year end. That is not a gradual recalibration — it is a full reversal of the dovish narrative that had been supporting risk assets and hard-money hedges alike. When both Bitcoin and gold sell off in tandem, it signals that the move is driven by real-rate pressure rather than crypto-specific sentiment: rising rate expectations lift the opportunity cost of holding non-yielding assets across the board.
Market impact
For Bitcoin specifically, the correlation with gold during macro-driven rate shocks reinforces its increasingly institutionalized behavior — it is trading as a macro asset, not a speculative outlier. The Goldman Sachs call extending the hold through 2026 sets a prolonged headwind for risk-on positioning. Traders should watch the next CPI print and any Fed commentary for signs that the jobs data is being treated as a one-off or as a trend confirmation.
Frequently asked questions
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Why did Bitcoin and gold sell off together after the May jobs report?
Both assets are non-yielding, so a stronger jobs report that raises the probability of rate hikes increases the opportunity cost of holding them. When real-rate pressure drives the move, Bitcoin and gold tend to correlate rather than diverge.
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What is Goldman Sachs now forecasting for Fed rate cuts?
Goldman Sachs expects the Fed to hold rates through all of 2026 and delay cuts until June and December 2027, a sharp reversal from the near-term easing consensus that prevailed just two weeks earlier.
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What probability are markets assigning to rate hikes before year end?
Following the May jobs report, markets are pricing a 75.5% probability of rate hikes before the end of 2026, compared to a consensus just weeks ago that was focused on the timing of cuts rather than the possibility of further tightening.
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