Can crypto and stock deal with a major correction if this unlikely scenario opens?

The October Reserve’s October Rate decision may be able to trigger an unexpected shocks on US and Bitcoin’s stocks as non -resolved federal government closure risks to caution.

Government shutdown delayed key data in advance of FOMC assembly

A partial closure of the federal government started On October 1, the shutter of many unnecessary services including the Bureau of Labor Statistics (BLS). This shutdown has endlessly delayed the September job reports – an important scale of health market that is expected early this month.

This data freeze will come a few weeks before the Federal Open Market Committee’s (FOMC) October 28–29 meetingwhere to express the next decision of the Fed’s interest rate.

Despite this interruption, market optimism remains elevated.

According to Goldprice.orgGold prices are closed at $ 3,886 per ounce on Friday, getting more than 48% year-to-date.

2025 gold rally Reflecting on the major purchase of the central bank of countries and strong ETF demand from private investors, driven by inflation concerns amid President Trump’s trade war, recorded national debt levels and efforts of some countries–BRICS members-to reduce the hope of US dollar assets since the start of the US-Ukraine riot.

At the time of writing, According to CoinDesk data.

Meanwhile, the average industry of Dow Jones and S&P 500 closed the week with record highs of 46,758.28 and 6,715.79, respectively, reflecting confidence in a properly transfer of Fed policy.

Today, Bitcoin, Gold and the S&P 500 are in or near record highs, perhaps due to expectations of additional reduction rates this year and the next and investors want to wrap up against the ongoing and increasing inflation that seems to be currently existing around the world.

Agreement Prices in the market a 25 basis-point fed cut

Futures and predictions markets are over-price at a 25 basis-point interest rate cut at the FOMC assembly.

On October 5, the CME Group’s Fedwatch tool The odds are placed at 96.2% for a 25 basis-point cut and 3.8% for unchanged.

As for the decentralized polymarket prediction platform, this Guess A 3% chance of a 50+ bps increase, a 90% chance of a 25 bps increase and an 8% chance without a change.

Why are deductions in Fed’s paused rate may not be as expected by entrepreneurs

The federal government’s continued shutdown is hiding a significant risk. With US Bureau of Labor Statistics (BLS) employees employees, important labor reports remain unaccountable, denying the updated wages and work data that are important for the analysis of the market tightness amid continuous inflation.

The Fed faces extremely difficult challenges in making a decision at the rate without the important economic maturity – essentially flying blind.

Lack of timely data has increased the real likelihood that some FOMC members may promote for pauseing current speed rates instead of proceeding as expected.

Without a clear visibility in the recent trajectory of the labor market, the risk of premature emergence that can strengthen inflation expectations is great. Federal Reserve’s previous actions during times of data shortage often lean on caution to avoid false mistakes.

At the same time, many factors deepen this uncertainty.

The government’s shutdown itself creates risks through furloughhed federal workers and potential permanent job losses, which may exacerbate economic growth but the size remains unclear.

Meanwhile, many investors have been positioned by portfolios in expecting additional cuts, which means that a surprise pause can unite markets and compare FOMC’s volatility that is more likely to be avoided.

Balance these concerns, the FOMC is likely to weigh the continuation of a moderate 25 basis-point cut to maintain confidence in the market and fence against economic risks. However, the pause remains a possible outcome provided by these uninterrupted challenges, emphasizing that market expectations of a cut, though strong, are not guaranteed.

Private and regional data provides a slight perspective in the middle of shutdown

Between today and the FOMC assembly, many private sectors and releasing region of the Federal Reserve region will provide slight economic signals despite shutdown.

If these indicators show the cooling of inflation and moderating growth, the Fed chair Jerome Powell may continue with the widely expected 25 basis-point cut. The stronger signal of perseverance of inflation or resilience of growth can push the fed toward a pause, opposing market pricing and increasing volatility.

If the shutdown ends, say, mid-October, the delayed official September Jobs report may be released in advance of the FOMC assembly, providing a clearer picture of data and potential validation of market expectations.

Why a 50 base-point cut is so unlikely

Markets mainly ruled a 50 basis-point rate cut because inflation remains above 2% Fed target, especially in services where pressure wages.

A half-cut cut is dangerous to sign premature easing and may ensure inflationary labor market and expectations.

Powell’s public statements Emphasize the precaution and dependency of data, making a more modest 25 basis-point that cut the careful path.

How investors can protect against a fed -pause scenario

Provided the potential for a policy pause that is not fully priced by markets, investors -particularly in crypto -should be considered the risk of being alerted:

• Putting Bitcoin options and major stock indices offer a pretty cheap way to guard against steep falls.
• Reducing high action or position of position in PABAGU -change of mind assets to reduce drawdowns.
• Adding exposure to safe shelters such as gold or treasury bonds can provide a portfolio ballast amidst stress on the market.
• Using Volatility ETF or funds to obtain from sudden volatility of spikes.

Institution investors regularly use such techniques; Retail investors have a growing number of low cost tools to similarly prepare for tail risks.

CONCLUSION: The markets face uncertain path to the next FOMC meeting

The October 28-29 FOMC meeting is shaping as a pivotal test for markets.

The continuing government’s shutdown has hidden important labor data, creating a dangerous blind spot in investor and policy expectations.

While markets are excessive price of a 25 basis-point rate cut, a fed pause or delayed driven by data uncertainty may trigger sharp correction in stocks and crypto. Investors should monitor private indicators of regional economic and regional inflation data in October and consider pragmatic prejudice to protect against surprise volatility.

A balanced risk of risk is essential to navigating this uncertain macroeconomic landscape.