Market Chaos Looms as Fed Prepares to Tinker with Rates Again 🤦‍♀️

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Markets

What to know:

  • October VIX futures are hinting at a major market freak-out post-Fed rate cut. 😱
  • Bitcoin’s mood swings are now more in sync with Wall Street’s than ever before. 🤑

If the Federal Reserve decides to play it cool and cut interest rates, as everyone’s betting they will on Sept. 17, things might get a bit… stormy. Or, you know, completely chaotic. Thanks, VIX index! 🙏

The VIX, aka Wall Street’s official panic button, is telling us that investors are expecting the market to do some serious acrobatics over the next 30 days. Higher numbers mean more uncertainty, and right now, it’s like everyone’s waiting for the other shoe to drop.

The gap between the October VIX futures and the September ones has widened to a whopping 2.2%, which is like finding out your best friend is actually a spy. According to TradingView, this is a big deal historically. The September contract expires the same day as the Fed meeting, so buckle up.

Greg Magadini, the director of derivatives at Amberdata, put it bluntly in their weekly newsletter: “Cash is fair compared to Sept. … but Sept. is extremely low compared to October futures.” In other words, traders are thinking, “Sure, everything’s fine now, but what about October?!”

The Fed is almost certain to lower the target rate by at least 25 basis points, with some daring souls even betting on a 50 bps cut. But here’s the kicker: the October futures suggest that once the Fed makes its move, all bets are off. It’s like the calm before the storm, but with a lot more numbers and charts.

“The VIX futures for September have priced away risk while October could be ugly … A theme to keep in mind for risk assets in my opinion,” Magadini warned. So, if you’re holding onto any risky assets, maybe start praying now. 🙏

Historically, the VIX and stock prices have a love-hate relationship. When one goes up, the other tends to plummet. So, if the VIX spikes after the Fed’s decision, it could mean bad news for equities. Prepare for a rollercoaster ride, folks!

if the market gets spooked, Bitcoin might just join the party. 🎉

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2025-09-08 19:50