Cryptos Rally as Experts Ease Recession and Stagflation Concerns
10/9/2025
Major cryptocurrencies and European stocks surged Wednesday as economists downplayed fears of a U.S. recession and stagflation following revised jobs data.
Bitcoin (BTC) reclaimed $112,000, trading around $113,745, while European equities opened higher, reflecting renewed market optimism. The boost followed a report from the U.S. Bureau of Labor Statistics (BLS), which revised the economy’s job growth downward by 911,000 for the 12 months through March 2025.
For months, investors had counted on a resilient labor market to sustain economic growth despite persistent inflation. Tuesday’s revision briefly spooked markets, pushing BTC from $113,000 to $110,800.
Some saw the revision as a recession warning. Michael Englund, chief economist at Action Economics, argued otherwise.
“These adjustments mainly reflect the long-term trajectory of the U.S. labor force rather than immediate economic risks,” Englund said. “Trend-growth for monthly payrolls is now likely in the tens of thousands, down from the hundreds of thousands previously. We project labor force growth of roughly 90,000 going forward.”
Englund noted that the post-COVID labor surge, driven by roughly one million net migrants annually, has shifted to a net out-migration of one to two million, implying slower employment growth in the future.
Markets have embraced this outlook. BTC climbed back above $112,000, while Ether (ETH), XRP, and Dogecoin (DOGE) erased much of Tuesday’s losses. Solana (SOL) surged to $222, its highest since February 1. S&P 500 futures rose 0.3%, and European equities opened higher.
Stagflation Risks Overstated
Despite concerns over inflation hovering around 3%, analysts argue that stagflation fears are exaggerated. Marc Chandler, chief market strategist at Bannockburn Global Forex, highlighted that U.S. GDP remains above the Fed’s non-inflationary trend.
“Inflation is slightly elevated, but the Fed appears focused on temporary tariff-driven increases. A return to easing seems likely,” Chandler said.
Traders currently see a 91% probability of a 25-basis-point rate cut to 4% on Sept. 17, though some anticipate a 50-basis-point move.
Focus on Upcoming CPI and PPI
Markets will closely watch Wednesday’s Producer Price Index (PPI) and Thursday’s Consumer Price Index (CPI). Signs of easing inflation could bolster risk assets, while higher-than-expected readings might trigger volatility.
“If the market expects a 50-basis-point cut but only 25 are delivered, a sell-off is possible,” said Greg Magadini, director of derivatives at Amberdata.
