The Fed's Next Move on Oct. 29: How a Scenario Few Expect Could Derail U.S. Stocks and Crypto

The Federal Reserve’s October complaint determination could trigger unexpected shocks successful U.S. stocks and Bitcoin arsenic unresolved national authorities shutdown risks unreality the outlook.

Government shutdown delays cardinal information up of FOMC meeting

A partial national authorities shutdown began connected Oct. 1, shuttering galore non-essential services including the Bureau of Labor Statistics (BLS). This shutdown has indefinitely delayed the September jobs study — a important gauge of labour marketplace wellness expected aboriginal this month.

This information frost comes conscionable weeks earlier the Federal Open Market Committee’s (FOMC) Oct. 28–29 meeting, wherever the Fed’s adjacent involvement complaint determination volition beryllium announced.

Despite this disruption, marketplace optimism remains elevated.

According to GoldPrice.org, Gold prices closed astatine $3,886 per ounce connected Friday, gaining implicit 48% year-to-date.

Gold’s 2025 rally reflects ample cardinal slope purchases by nations and beardown ETF request from backstage investors, driven by ostentation concerns amid President Trump’s commercialized war, grounds U.S. nationalist indebtedness levels and efforts by immoderate countries—especially BRICS members — to trim reliance connected U.S. dollar assets since the Russia-Ukraine struggle began.

At the clip of writing, according to CoinDesk Data, bitcoin was trading astatine astir $123,196, not acold from the all-time-high terms of $125,506, observed earlier successful the day, driven by beardown organization involvement and crypto ETF inflows.

Meanwhile, the Dow Jones Industrial Average and S&P 500 closed the week astatine grounds highs of 46,758.28 and 6,715.79, respectively, reflecting assurance successful a creaseless Fed argumentation transition.

Today, bitcoin, golden and the S&P 500 are astatine oregon adjacent grounds highs, astir apt owed to expectations of further complaint cuts this twelvemonth and adjacent and investors wanting to hedge against the persistent and expanding ostentation that seems to presently beryllium passim the world.

Market statement prices a 25 basis-point Fed cut

Futures and prediction markets overwhelmingly terms successful a 25 basis-point interest-rate chopped astatine the FOMC meeting.

As of Oct. 5, The CME Group’s FedWatch Tool puts the likelihood astatine 96.2% for a 25 basis-point chopped and 3.8% for nary change.

As for decentralized prediction level Polymarket, it predicts a 3% accidental of a 50+ bps increase, a 90% accidental of a 25 bps summation and an 8% accidental of nary change.

Why the Fed pausing complaint cuts mightiness not beryllium arsenic improbable arsenic traders expect

The ongoing national authorities shutdown conceals a important risk. With the U.S. Bureau of Labor Statistics (BLS) employees furloughed, captious labour reports stay unreleased, denying the Fed updated wage and employment information indispensable for evaluating marketplace tightness amid persistent inflation.

The Fed faces the exceptionally hard situation of making a complaint determination without important economical input — fundamentally flying blind.

This deficiency of timely information raises the precise existent anticipation that immoderate FOMC members whitethorn advocator for pausing the existent gait of complaint cuts alternatively than continuing arsenic expected.

Without wide visibility connected the labour market’s caller trajectory, the hazard of premature easing that could destabilize ostentation expectations looms large. Past Federal Reserve actions during periods of information scarcity person often leaned toward caution to debar argumentation missteps.

At the aforesaid time, respective factors deepen this uncertainty.

The authorities shutdown itself creates downside risks done furloughed national workers and imaginable imperishable occupation losses, which whitethorn worsen economical maturation but whose magnitude remains unclear.

Meanwhile, galore investors person positioned portfolios successful anticipation of further cuts, meaning a astonishment intermission could unsettle markets and trigger volatility the FOMC would similar to avoid.

Balancing these concerns, the FOMC is apt weighing continuing a humble 25 basis-point chopped to prolong marketplace assurance and hedge against economical risks. Still, the intermission remains a plausible result fixed these unprecedented challenges, emphasizing that marketplace expectations of a cut, though strong, are not guaranteed.

Private and determination information supply partial insights amid shutdown

Between present and the FOMC meeting, respective private-sector and Federal Reserve determination information releases volition supply partial economical signals contempt the shutdown.

If these indicators amusement cooling ostentation and moderating growth, Fed Chair Jerome Powell could proceed with the widely-expected 25 basis-point cut. Stronger signals of ostentation persistence oregon maturation resilience mightiness propulsion the Fed toward a pause, contradicting marketplace pricing and expanding volatility.

If the shutdown ends by, say, mid-October, the delayed authoritative September jobs study could beryllium released up of the FOMC meeting, providing a clearer information representation and perchance validating marketplace expectations.

Why a 50 basis-point chopped is highly unlikely

Markets person mostly ruled retired a 50 basis-point complaint chopped due to the fact that ostentation remains supra the Fed’s 2% target, particularly successful services wherever wage pressures linger.

A half-point chopped would hazard signaling premature easing and could destabilize the labour marketplace and inflationary expectations.

Powell’s nationalist statements stress caution and information dependency, making a much mean 25 basis-point chopped the prudent path.

How investors tin support against a Fed intermission scenario

Given the imaginable for a argumentation intermission not afloat priced by markets, investors —particularly successful crypto — should see hedging risk:

• Put options connected bitcoin and large banal indices connection a comparatively inexpensive mode to defender against steep downside swings.
• Reducing precocious leverage oregon presumption sizing successful volatile assets to mitigate drawdowns.
• Increasing vulnerability to harmless havens specified arsenic golden oregon Treasury bonds tin supply portfolio ballast amid marketplace stress.
• Using volatility ETFs oregon funds to summation from abrupt volatility spikes.

Institutional investors routinely employment specified strategies; retail investors person a increasing fig of low-cost tools to likewise hole for process risks.

Conclusion: markets look uncertain way into the adjacent FOMC meeting

The October 28-29 FOMC gathering is shaping up arsenic a pivotal trial for markets.

The ongoing authorities shutdown has obscured captious labour data, creating a risky unsighted spot successful capitalist and policymaker expectations.

While markets overwhelmingly terms a 25 basis-point complaint cut, a Fed intermission oregon hold driven by information uncertainty could trigger crisp corrections successful stocks and crypto. Investors should show backstage economical indicators and determination ostentation information implicit October and see pragmatic hedging to support against astonishment volatility.

A balanced hazard posture is indispensable successful navigating this uncertain macroeconomic landscape.