U.S. May Payrolls Far Exceed Forecasts, Rate-Hike Bets Pressure Risk Assets

The U.S. Labor Department's monthly nonfarm payrolls and unemployment data are key gauges used by the Federal Reserve to assess inflation, wage pressures and interest-rate policy. Continued labor-market resilience would reduce the urgency for Fed rate cuts, tighten expectations for dollar liquidity and weigh on valuations of risk assets such as cryptocurrencies.

The Labor Department's latest data showed nonfarm payrolls rose by 172,000 in May, well above market expectations, while the unemployment rate held at 4.3%. After the release, traders increased bets that the Fed would delay rate cuts this year or even resume raising rates. The more hawkish rate outlook added pressure on cryptocurrencies and other risk assets.