The Fed’s Next Move on Oct. 29: How A Scenario Few Expect Could Derail US Stocks and Crypto

The Fed’s Next Move on Oct. 29: How A Scenario Few Expect Could Derail US Stocks and CryptoMarkets Brace for the Fed’s Oct. 29 Fomc Decision Amid Shutdown and US Jobs Market and Inflation Uncertainty, with Crypto and Stocks Vulnerable to Sharp Downside Moves.Updated Oct 5, 2025, 5:38 PM PUBLISHED OCT 5, 2025, 4:09 PM

The Federal Reserve’s October Rate Decision Could Trigger Unexpectioned Shocks in US Stocks and Bitcoin As Unresolved Federal Government Shutdown Risks Cloud The Outlook.

Government Shutdown Delays Key Data AHEAD OF FOMC MEETINGA Partial Federal Government Shutdown Began on Oct. 1, Shuttering Many non-Ossential Services Including the Bureau of Labor Statistics (BLS). This Shutdown Has Indefinitely Delayed the September Jobs Report – A Crucial Gauge of Labor Market Health Expectioned Early This MONTH.

This Data Freeze Comes Just Weeks Before The Federal Open Market Committee’s (FOMC) OCT. 28–29 Meeting, Whore The Fed’s Next Interest Rate Decision Will Be Announced.

Despite this disruption, Market Optimism Remains Elevated.

Accorness to GoldPrice.org, Gold Prices Closed At $ 3.886 per onic on Friday, Gaining Over 48% Year-To-Date.

Gold’s 2025 Rally Reflects Large Central Bank Purchases by Nations and Strong Etf Demand from Private Investors, Driven by Inflation Concracker Some countries-especialyly brics members-to redece Radu Reliance on US dollar Assets Since the Russia-Ukraine Conflict Began.

AT TIME OF WRITING, ACCORDING TO COINDESK DATA, BITCOIN WAS Trading at AT ARUND $ 123,196, Not Far From The All-Time-High Price and Crypto etf Inflows.

Meanwhile, The Dow Jones Industrial Average and S&P 500 Closed The Week at Record Highs of 46.758.28 and 6.715.79, Respectively, Reflection Confidence in A Smooth.

TODAY, BITCOIN, GOLD AND The S&P 500 Are at OR Record Highs, Probably Due to Expectations of Further Rate Cuts This YEAR AND NEXT AND INVESTORS WANTING TO HEDGE AGAINSTTA. to currently exist throughout the World.

Market Consensus Prices A 25 Basis-Point Fed CutFutures and Prescription Markets OverWhelmingly Price in A 25 Basis-Point Interest-Rate Cut at the Fomc Meeting.

As of Oct. 5, The CME Group’s Fedwatch Tool Puts at 96.2% for A 25 Basis-Point Cut and 3.8% for No Change.

As for Decentralized Platform Polymarket, IT Predicts A 3% CHANCE OF A 50+ BPS Increase, A 90% CHANCE OF A 25 BPS Increase and An 8% CHANCE OF NO CHANGE.

WHY The FED PAUSING RATE CUTS MIGHT NOT BE AS UNLIKELY As Traders ExpectThe Ongoing Federal Government Shutdown Conceaals A Significant Risk. With the US Bureau of Labor Statistics (BLS) Employees Furloughed, Vital Labor Reports Reports Reports Reports Unreleved, Denying The Fed Updated Wage and Employment Data Emphtintintintaentiu.

The Fed Faces the Exceptionally Differal Challenge of Making A Rate Decision Without Crucel Economic Input – Essentally Flying Blind.

This Lack of Timely Data Raises the Very Real Possibility that some fomc members maybers May Advocate for Passion of the Current Pace of Rate Cuts Racher than Continuing as Expert.

Without Clear Visability on the Labor Market’s Recent Tradery, The Risk of Premature Easing that Could Could Destabilize Inflation Expectations Looms Large. Past Federal Reserve Actions Durying Periods of Data Scarcity Have ofFTEN LEANED TOWARD CAUCTION TO AVOID Policy Misses.

At the Same Time, Several Factors DeEpen this uncertainty.

The Government Shutdown ITSELF CREATES DOWNSIDE RISKS THRUGH FURLUGHED FEDERAL WORRKERS AND PETENTIAL PERMANENT Job Losses, Which May Worsen Economic Growth Butuda.

Meanwhile, Many Investors Have Positioned Portfolios in Anticipation of Further Cuts, Meaning A Surprise Pause Could Unsettle Markets and Trigger Volatility.

Balancing Tese Conceerns, The Fomc Is Likely Weightinuing A Modest 25 Basis-Point Cut to Sustain Market Confidentnce and Hedge Against Economic Risks. Still, The Pause Remains a Plausible Outcome Given These Unprecedated Challenges, Emphasizing that Market Expectations of A Cut, Thought Strong, Are Not Guaranteed.

Private and Regional Data Provide Partial Insights Amid ShutdownBetween Now and the Fomc Meeting, Several Private-Sector and Federal Reserve Regional Data Release of Will Provide Partial Economic Signals Despite The Shutdown.

If these Indicators Show Cooling Inflation and Moderning Growth, Fed Chair Jerome Powell Could ProCed with The Widly-Exectored 25 Basis-Point Cut. Stronger Signals of Inflation Persistency or Growth Resiliency Might Push the Fed Toward A Pause, ContraDICTING MARKET PRICING AND INCREASING VALATITY.

If The Shutdown Ends by, Say, Mid-Octber, The Delayed Official September Jobs Report Could Be Released AHEAD OF THE FOMC MEETING, PROVINGING A CLEARER DATA PICTULALALALALALALYAlilli

WHY A 50 BASIS-POINT CUT IS HIGHLY UnlikelyMarkets have largely Ruled Out A 50 Basis-Point Rate Cut Because Inflation Remains Above the Fed’s 2% Target, Especialyly in Services WHERE WAGE Pressures Linger.

A HALF-POINT CUT Wuld Risk Signaling Premature EASING AND COURCKE DESTABILIZE The Labor Market and Inflationary Expectations.

Powell’s Public Statements Emphasize Caution and Data Dependency, Making A More Moderate 25 Basis-Point Cut the Prudent Path.

How Investors Can Protect Against A Fed Pause ScenarioGiven the potential for a policy pause not ful Fully priced by markets, investors —particularly in crypto – Should Consider Hedging Risk:

• Put options on Bitcoin and Major Stock Indices Offer A Relativly InExpensive Way to Guard Against Steep Downside Swings.
• Reducing High Leverage or Position Sizing in Volatile Assets to Mitigate DrawDowns.
• Increase exposure to safe havens Such as Gold or Treasury Bonds Can Provide Portfolio Ballast Amid Market Stress.
• Using Volatility Etfs or Funds to Gain from Sudden Volatility Spikes.

Institutional Investors Routinely Employ Such Strategies; Retail Investors Have A Growing Number of Low-Cost Tools to Similarly Prepare for Tail Risks.

AI Disclaimer: Parts of this Article Were Genered with The Assistance from AI Tools and Review by Our Editory Team to Enseure Accucy and Adhesion To Our Standards. For more information, See Coindesk’s Full Ai Policy.

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