This week promises to be eventful, with several economic events scheduled in the US that could impact traders’ and investors’ portfolios.
All this is happening against the backdrop of the ongoing government shutdown. There has been no data from official sources for almost 30 days.
US economic data may affect the market as early as this week
Traders should closely monitor the following events. They can help adjust portfolios and avoid unnecessary risks.
Economic events in the US this week. Source: Trading Economics
FOMC rate decision — the main event of the week
The most important event in the US economy this week is the Fed meeting, which will take place on Wednesday, five days after the release of September inflation data.
On October 29, the Federal Open Market Committee (FOMC) will announce whether it will keep the rate unchanged or hint at a possible cut in the future.
This decision is critically important, as it determines liquidity, risk appetite, and the behavior of participants in all financial markets.
According to CME FedWatch data, traders have little doubt: with a probability of 96.7% the rate will be cut by another 0.25% to 4%.
Probability of a rate cut. Source: CME FedWatch Tool
Jerome Powell’s press conference may affect rate expectations for 2025
Although the FOMC rate decision itself is extremely important, the market will pay no less attention to the tone of Fed Chair Jerome Powell and the updated forecast chart (dot plot), which will be published with the release. Powell will address the press half an hour after the data is announced.
While everyone is waiting for the rate decision, the real driver of volatility may lie elsewhere — in Jerome Powell’s tone. The Fed Chair will speak at a press conference immediately after the release, and the market will be listening to every phrase.
‘Rate expectations for 2025 depend on rhetoric; right now, two or three cuts are priced in, and any deviation could cause a sharp move midweek,’ say analysts at AlphaBTC.
Recently, Powell has already indicated that the QT program, i.e., the Fed’s balance sheet reduction, is nearing its end. According to him, the regulator will stop as soon as bank reserves rise slightly above the ‘comfortable level.’
But all these signals are now coming through as noise, the US shutdown is dragging on, and the market is essentially operating blindly. Until Powell clarifies the position, participants will keep their finger on the button.
Initial jobless claims data
While everyone is focused on the Fed rate, equally important data will be released on Thursday — statistics on new jobless claims. And these are not just numbers — today, the US labor market has become the most important marker for cryptocurrencies, especially bitcoin.
For the week ending October 11, the number of claims from federal sector employees rose by 121% to 7,244. This is the highest figure since the 2019 shutdown, notes Kobeissi Letter.
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Although statistics are currently suspended due to the government shutdown, individual states continue to publish data. Since the shutdown began on October 1, the number of claims from government employees has already jumped by 1,200%.
There is another metric — continued jobless claims. It increased by 9% over the week and reached 9,430, a level not seen in more than three years. This is a serious signal for everyone trading macro and looking to the US economy as an indicator of sentiment in crypto.
PCE — another important indicator for the crypto market
On Friday, the September consumer spending inflation data is expected to be released. This indicator is considered one of the main benchmarks for the Fed. In August, PCE inflation was 2.7% year-on-year. The figure was higher than the previous month, but the market expected it, so there was no strong reaction.
Analysts believe that due to persistent inflation, the regulator will not change the rate in October. PCE still exceeds target levels.
‘Why do I think the Fed won’t move the rate in October? Inflation is still high: PCE — 2.7%, core index — 2.9%, median — about 3.3%. All above target,’ wrote one market participant.
Crypto, like traditional markets, reacts sharply to macro statistics. Especially if these are signals from the Fed. When rates rise, money in the system becomes more expensive, and interest in speculative assets decreases. But talk of possible easing quickly brings back liquidity and risk appetite.
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Traders keep their finger on the pulse: any new number or phrase from the press conference can change the picture. That’s why crypto positions are often reviewed in real time.
