Breaking Up Fed Interest Rate Decision & US-China Trade Deal This Week

This is a week that may change the markets. The announcement of Fed Interest Rate Decision, tech profits, and the US-China negotiations will require investors to monitor major macro and crypto trends.

Key Events This Week

Source: The Kobeissi Letter

On Wednesday, October 30:

• Federal Reserve announces Fed interest rate decision

• Federal Reserve Chair Jerome Powell gives a press conference, with a paucity of new US inflation data.

• Earnings reports by major tech giants, including Microsoft, Alphabet (Google), and Meta, affect more than $15 trillion of market capitalization.

On Thursday, October 31:

• Apple and Amazon publish Earning reports

• US President Trump meets with the President of China Xi only 48 hours before a 100% tariff is to become effective.

Apart from this , 20% of the S&P 500 corporations are expected to announce earnings this week. Also, US GDP, core PCE, and rate decisions of the ECB/BOJ will affect the global liquidity and market sentiment.

Why This Week is Important

• The week is very crucial to investors in both the traditional and cryptocurrency markets.

• There is the uncertainty of the government shutdown that is nearing the 30th day, and Fed decisions will affect the cost of borrowing and liquidity.

• The earnings of Tec and the US-China trade talks can cause volatility in the market.

• The impact of rate cuts on on-chain lending, stablecoin yields, and ETH staking patterns is of particular interest to crypto investors, and they are determining how they will approach the next few months.

Last Week's Data and Overview

• Last week, US inflation data indicated that September CPI was at 3% which was lower than the expected 3.1%.

• The Core CPI was also at 3, which indicated moderate inflation. Traders are now pricing two further 25-basis-point Fed rate cuts in 2010.

• The University of Michigan Consumer Confidence Index dropped to 53.6, which indicated wary consumer confidence.

Source: Wu Blockchain X

• China increased its Q3 GDP by 4.8%, a little higher than the expectations of 4.7%.

• Fed showed interest in tokenized products and payment innovation, which means that it is becoming interested in the crypto ecosystem.

• This mix of data preconditions a shaky week both in the conventional markets and in decentralized finance (DeFi) services.

The Fed Rate Cut Impact on Crypto Market Investors

Cuts in the Federal rate do not have the same impact on crypto as they do on the traditional markets. The headlines tend to imply that lower rates = crypto boom, but the truth is more subtle. Fed rate cut probability 2025 impacts:

• Short-term impacts: Reduced Fed rates reduce the appeal of traditional yields, which leads capital to move to DeFi applications such as Aave and Morpho. USDC lending rates on Aave have already been more actively used, pushing the on-chain rates to the limit temporarily.

• Long-term impacts: Low-cost borrowing decreases the interest rates in the economy, which slowly decreases the on-chain lending rates. APYs are declining across markets as Pendle and other platforms that track forward DeFi yields are indicating a downward trend in the yield.

Other effects are adjustments to the supply of stablecoins and higher staking of ETH since reduced returns on traditional assets will push investors to staking and other yield-generating crypto-plans. The knowledge of such dynamics enables investors to predict the short-term yield spikes and long-term cost cuts and inform lending, borrowing, and staking behaviors in crypto markets.

Conclusion

This is a critical macro week, tech earnings, and geopolitical week, which is crucial in the market and crypto investment. The most important thing to avoid volatility and opportunities is to stay informed.