Fed Chair Speaks Amid US Govt Shutdown: How will Crypto Market React?

With the US government shutdown showing no signs of ending, financial markets are bracing for impact, sparking concerns about the potential economic fallout and increased volatility. However, the Federal Reserve is moving forward with its agenda, undeterred by the ongoing shutdown. Key events looming include the FOMC Meeting Minutes and Fed Chair Jerome Powell's Speech. Now, the community is keenly awaiting to see how these events will impact the crypto market.

US Govt Shutdown Drags On: Key Events to Watch

The US government shutdown persists into its sixth day, with no immediate resolution in sight. As it is expected to continue this week, it is likely to delay the release of several economic data, including the trade deficit, weekly initial jobless claims, and wholesale inventories. Still, a glimpse into the economy will be provided through Fed officials' comments and key consumer sentiment data.

Notably, the central bank is expected to organize its scheduled events without failure. As estimated, the Fed is set to release minutes from its latest meeting, where it implemented its first interest rate cut of 2025. For context, the Fed trimmed interest rates by a quarter point to 4%-4.25%, marking its first cut since December. Policymakers also projected two additional rate reductions this year, taking the rate to 3.5%-3.75%. They said, “The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen.”

In addition, the central bank’s community banking conference is set to feature a pre-recorded introduction from Chair Jerome Powell, with Treasury Secretary Scott Bessent and Fed Vice Chair Michelle Bowman participating in a fireside chat. Additional Fed speakers will also be sharing their insights during the event. This conference aims to bring together industry leaders to discuss key issues affecting community banks.

Will the Crypto Market Rally Continue?

The crypto market has been experiencing a rollercoaster ride over the past week, marking significant gains despite the US govt shutdown. This rally is mainly driven by the overall bullish trends in October. Historically, the month of October is favourable for crypto markets, thus called Uptober.

The industry is currently down by a marginal 1.12% reaching $4.21 trillion. This downfall is mainly driven by the US govt shutdown and the uncertainty surrounding the key economic data.

Nonetheless, future events are anticipated to create a positive effect on the crypto market. Traders are clearly waiting on the FOMC meeting minutes and Chair Powell's remarks for direction on the monetary policy. The plausible influence of the crypto market on the actions seems reasonable with the present economic uncertainty, which would create tension for the market's reactions. Participants also monitor for economic signs of weakness or vigor that would influence the Fed's BOE's thoughts for future actions.