Market Volatility Expected to Rise Following Fed Rate Cut on September 17

Risk assets may experience increased volatility if the Federal Reserve lowers interest rates on September 17. Key points include:

The VIX index, which measures expected market volatility, shows heightened uncertainty with a spread of 2.2% between October and September futures.
The September contract expires on the same day as the Fed meeting, indicating low risk pricing ahead of the decision.
The Fed is anticipated to reduce its target rate by at least 25 basis points, with some expecting a 50 bps cut.
October futures suggest investors expect increased turbulence post-decision.
Historically, VIX rises during market stress, indicating potential downswing in equities after the Fed's announcement.
Bitcoin has shown a negative correlation with stock prices, suggesting volatility could impact the cryptocurrency market negatively.
Bitcoin's implied volatility indices have reached record correlations with the VIX, reflecting its alignment with market trends.

The chart shows the spread between October and September VIX futures. (TradingView)