The federal reserve’s October reserve rate decision could trigger unexpected shocks in American actions and Bitcoin, because the risk of non -resolved federal government stops the prospects.
Government closure delays key data before the FOMC meeting
Partial closure of the federal government began on October 1, closing many non -essential services, including the Bureau of Labor Statistics (BLS). This closure has indefinitely delayed the report on September jobs – a crucial gauge in the health of the labor market expected at the beginning of the month.
This data freezing occurs just a few weeks before the meeting from October 28 to 29 of the Federal Market Committee (FOMC), where the next Fed interest rate decision will be announced.
Despite this disturbance, market optimism remains high.
According to GoldPrice.org, gold prices ended at $ 3,886 on Friday, earning more than 48% up to date.
The Gold rally in 2025 reflects major purchases of central banks by nations and a high demand for private investors ETF, motivated by inflation problems in the middle of the trade war of President Trump, record the levels of American national debt and the efforts of certain countries – in particular members of the BRICS – to reduce dependence on the active in the US dollar since the start of the conflict Russia-Ukraine.
At the time of writing the time of writing, according to Coindesk data, Bitcoin was negotiated at around $ 123,196, not far from the price of all time of $ 125,506, observed earlier in the day, driven by solid institutional interests and Crypto ETF inputs.
Meanwhile, the Dow Jones Industrial Average and S&P 500 closed the week at record peaks of 46,758.28 and 6,715.79, reflecting confidence in a smooth political transition.
Today, Bitcoin, Gold and the S&P 500 are at record or close heights, probably due to the expectations of new rate decreases this year and the next investors and investors wishing to cover themselves against persistent and growing inflation which seems to exist in the whole world.
Market consensus price a drop in the Fed of 25 basic points
The term and prediction markets are massively prices in a drop in the interest rate of 25 points in the FOMC meeting.
As of October 5, the Fedwatch tool of the CME group put the ratings at 96.2% for a reduction of 25 basic points and 3.8% for no change.
Regarding the decentralized prediction platform polymarket, it predicts a chance of 3% increase of more than 50 BPS, a chance of 90% increase of 25 BPS and 8% of change.
Why may not be as unlikely as merchants are not as unlikely as the merchants await
The closure of the current federal government hides significant risk. Employees of the United States Labor Statistics Office (BLS), leave employees, vital work relations remain unpublished, denying data on wages and employment to update the Fed, essential to assess the market tightness in the middle of persistent inflation.
The Fed is confronted with the exceptionally difficult challenge to make a rate decision without crucial economic contribution – which flies essentially blind.
This lack of data in a timely manner increases the very real possibility that certain members of the FOMC can plead to take a break from the current rate of rate drops rather than continue as planned.
Without a clear visibility on the recent trajectory of the labor market, the risk of premature softening which could destabilize the expectations of inflation is looming. The actions of the previous federal reserve during periods of data rarity have often leaned towards caution to avoid missteps.
At the same time, several factors deepen this uncertainty.
The government’s judgment itself creates lower risks thanks to federal workers on leave and loss of permanent potential jobs, which can worsen economic growth but whose magnitude remains clear.
Meanwhile, many investors have positioned portfolios in anticipation of new cuts, which means that a surprise break could disrupt the markets and trigger the volatility that the FOMC would prefer to avoid.
Balancing these concerns, the FOMC probably weighs by continuing a modest reduction of 25 basic points to maintain market confidence and hide against economic risks. However, the break remains a plausible result given these unprecedented challenges, stressing that the expectations of the market of a cup, although strong, are not guaranteed.
Private and regional data provide partial information in the middle of the closure
By the FOMC meeting, several regional data versions of the private sector and the federal reserve will provide partial economic signals despite the closure.
If these indicators show cooling inflation and moderating growth, the president of Fed Jerome Powell could proceed with the largely planned reduction of 25 basis points. Stronger signals of the persistence of inflation or the resilience of growth could push the Fed towards a break, contradict market prices and increased volatility.
If the closure ends with, for example, in mid-October, the official official September report could be published before the FOMC meeting, providing a clearer image and potentially validating market expectations.
Why a cut of 50 base points is very unlikely
The markets have largely excluded a drop of 50 basic points because inflation remains greater than the target target of the Fed, especially in services where wage pressures persist.
A half-point cut could point out a premature softening and could destabilize the labor market and inflationary expectations.
Powell’s public statements emphasize prudence and dependence on data, which makes a more moderate base point of 25 basis the career path.
How investors can protect themselves from a fed break scenario
Given the potential of a political break which is not entirely evaluated by the markets, investors – in particular in crypto – should consider the risk of coverage:
- Bitcoin installation options and the main stock indices offer a relatively inexpensive way to protect against swings with a steep decline.
- Reduce the high lever effect or the dimensioning of the position in volatile assets to alleviate dirts.
- The increase in exposure to safe paradise such as gold or cash bonds can provide a portfolio ballast in the middle of the market stress.
- Use of FNBs or volatility funds to draw sudden volatility peaks.
Institutional investors regularly use such strategies; Retail investors have an increasing number of low -cost tools to prepare in the same way for tail risks.
Conclusion: the markets face an uncertain path to the next FOMC meeting
The FOMC meeting of October 28 and 29 promises to be a hinge test for the markets.
The current government closed has masked vital work data, creating a risky blind spot in the expectations of investors and decision -makers.
While the markets massively evaluate a drop in the basic rate of 25 points, a break from the Fed or a delay caused by the uncertainty of the data could trigger net corrections in actions and the crypto. Investors should monitor private economic indicators and regional inflation data in October and consider pragmatic coverage to protect themselves against surprise volatility.
A balanced risk posture is essential to navigate in this uncertain macroeconomic landscape.
