Bitcoin (BTC) traded little changed near $84,000 on Thursday, the opening session of the fourth quarter, after closing out its best three-month stretch since early 2024. The tentative calm across crypto markets came as U.S. Treasury yields pulled back from multi-decade highs and traders pared bets on additional Federal Reserve rate hikes ahead of Friday’s September employment report.

Among the day’s other developments: Federal Reserve Vice Chair Philip Jefferson said policymakers need “more time” before any decision on additional rate hikes; oil prices jumped on reports the U.S. is sending a third aircraft carrier to the Middle East; France’s bond market showed mounting strain against a backdrop of widening sovereign spreads; and the NEAR token sank 9% after a reported $3.8 million exploit of NEAR Intents.

Fed’s Jefferson says ’more time’ needed before decision on additional rate hikes

Federal Reserve Vice Chair Philip Jefferson said Thursday afternoon that he and his colleagues need more time before deciding whether additional rate hikes are warranted.

“Since our September meeting, yields across the term structure have increased further, a sign that investors are reassessing the evolving macroeconomic landscape,” Jefferson said in prepared remarks published on the Federal Reserve’s website.

“My colleagues and I will need to come to our own judgment, which may take more time,” he continued.

The comments are the latest sign from the Fed that markets may have gotten ahead of themselves in assessing the pace of central bank rate hikes. According to CME’s FedWatch tool, the odds of a Fed move at its Oct. 28 meeting have fallen to 30% from 70% earlier this week. The odds of one or more rate hikes by year-end have dipped to 80% from 95% one week ago.

Bitcoin tentatively rises as rates retreat

Bitcoin (BTC), changing hands at $84,852.26, was moving up modestly in U.S. afternoon action, higher by 1% over the past 24 hours at $84,800.

Possibly helping the bid was a sharp decline in interest rates on Thursday. The 10-year U.S. Treasury yield was lower by 9.4 basis points at 5.217%, after rising to 5.36% earlier in the session. The 2-year Treasury note — which, because of its shorter duration, is more closely tied to Fed policy — was down 12.3 basis points at 4.764% as traders pared bets on additional central bank rate hikes.

Thursday’s economic releases — weekly jobless claims and the national PMI — gave zero signs that either the economy or price pressures were easing. Two forces were likely at work in the yield retreat: first, satiated bond shorts lightening up ahead of Friday’s key U.S. September employment report, and second, rumblings of a budding European debt crisis, as French bond spreads relative to German blew out to levels not seen since the last debt crisis more than a decade ago.

Oil jumps to session high on signs of Middle East escalation

Oil prices surged to session highs on signs of escalation in the Middle East. Citing a U.S. official, the Jerusalem Post reported that the Trump administration is sending a third aircraft carrier and an additional Marine unit to the region, as shared on X.

WTI crude oil, which had slipped earlier to below $89 per barrel, was recently higher by 2.5% at $92.63. Brent crude rose 3.6% to $101.53.

French bond market teeters as euro slides

“It’s been a while since we had a European sovereign debt crisis,” wrote ZeroHedge on X on Thursday.

Something is indeed going on in France. The country’s 10-year government bond (OAT) yield rose another eight basis points on the day, even as the German 10-year Bund yield was lower by six basis points. That widened the spread between German and French 10-year paper to 135 basis points, and credit default swap (CDS) spreads on French bonds soared to a 13-year high. For perspective, the 10-year Bund/OAT spread has traded mostly in a range of about 50–80 basis points over the past few years.

The euro is quickly losing ground versus the greenback, down another 0.9% on the day to $1.1231, its weakest level in about five months.

It’s a well-known axiom that central banks tighten monetary policy until something breaks — and that could be happening across the Atlantic. Traders continued to abandon bets on another imminent Fed rate hike. The 2-year U.S. Treasury yield fell 7.5 basis points on Thursday to 4.81%, with the odds of a Fed move in October shrinking to 33.8% after sitting at about 70% earlier this week.

U.S. manufacturing PMI meets estimates as price pressures worsen

The ISM Manufacturing PMI edged down to 54.5 in September from 54.6 previously, according to the institute’s release. Economist forecasts had been for a small rise to 55. Any reading above 50 indicates economic expansion.

The New Orders subindex rose to 55.3 from 53.7. The Prices Paid subindex climbed to 77.9 from 71.1, topping forecasts for 72.3. Perhaps even more troubling, survey respondents reported every single commodity as up in price and exactly zero commodities as down in price.

Bottom line: the report showed an economy still in strong expansion mode, with inflation pressures worsening. Markets weren’t really reacting, as traders looked ahead to Friday’s September employment report.

NEAR token sinks 9% on reported $3.8M exploit

The NEAR token was lower by 9% after on-chain sleuth ZachXBT reported that NEAR Intents was exploited for $3.8 million several hours earlier. NEAR Intents has reportedly temporarily suspended operations.

In an update, the NEAR Intents team said on X: “Earlier today NEAR Intents services were stopped after a security incident was detected.” The team that “the incident was caused by a bug in the Omni deposit and withdrawal infrastructure interaction with NEAR Intents smart contract.”

“The contract-side vulnerability has been patched,” the team wrote. “The operations of the NEAR Intents and near(.)com are expected to resume within 1h.”

Bond yields post largest monthly move in four years

The 10-year Treasury yield rose a whopping 53 basis points in September, the largest monthly move since September 2022, as Yahoo Finance’s Julie Hyman noted on X.

The comparable surge in September 2022 was enough to knock the S\u0026P 500 down by more than 9% that month, she noted. This time around, though, stocks barely budged, with the S\u0026P 500 dipping just 0.45%.

As for bitcoin, it fell 3.1% in September 2022 — actually not too bad a result considering the carnage in crypto that year. BTC rose 6.3% this past September.

Jobless claims continue to show no stress in labor market

Initial jobless claims edged lower to 197,000 last week, according to the just-released government report, down from 198,000 previously and just below market forecasts for 200,000. The four-week average dipped to 200,000 from 202,500.

Twenty-four hours from now, markets will receive the government’s Nonfarm Payrolls report for September, with economists expecting 90,000 jobs to have been added and the unemployment rate to hold at 4.1%.

Bitcoin treads water as fourth quarter gets underway

Bitcoin rose 42.7% in the third quarter, its best quarterly performance since jumping 68.7% in the first quarter of 2024. Ether (ETH), at $2,695.29, rose 70.8%, its best result since soaring 160.7% in the first quarter of 2021.

Both cryptocurrencies were about flat on the first day of the fourth quarter, with bitcoin just under $84,000 and ether just above $2,700.

Interest rates have become the big macro story. The U.S. 10-year Treasury yield touched yet another 24-year high overnight at 5.362% before pulling back to 5.282%, as bearish traders likely hedged bets ahead of Friday’s U.S. Nonfarm Payrolls report for September. Economist forecasts are for the U.S. to have added 90,000 jobs last month and the unemployment rate to hold at 4.1%.

Editor’s note: This article is based on CoinDesk’s live markets coverage of Thursday’s session.