The Month In One Paragraph
October reverses the order in which a Federal Open Market Committee (FOMC) decision is normally made. The committee meets on 27 and 28 October with no Summary of Economic Projections, and the September personal consumption expenditures (PCE) price index, the gauge it actually targets, arrives on 29 October, the morning after. It will have the September employment report on 2 October, the Consumer Price Index (CPI) on 14 October and the Producer Price Index (PPI) on 15 October. Pricing into the month is close to a coin toss: fed funds futures put 47.1 percent on a further increase on 28 October against 52.9 percent on no change, while the committee’s own September projections put the policy rate at 4.1 percent at the end of both 2026 and 2027, one more increase and then nothing given back. The price of money has meanwhile kept rising on its own: the 10-year inflation-adjusted Treasury yield, the real return on a risk-free asset, reached 2.90 percent on 28 September from 2.44 percent at the end of August, and the 30-year nominal yield reached 5.59 percent on 29 September. Bitcoin rose about 6 percent in September against that, carried by roughly $2.5 billion of net inflows into US spot bitcoin exchange-traded funds (ETFs) in the three weeks to 29 September. October tests whether that bid will keep paying a rising real return.
October Catalyst Calendar
DateRelease or EventWhy It MattersFri 2 Oct, 8:30Employment Situation, SeptemberAugust added 162,000 jobs at 4.1 percent unemployment. A second firm month removes the labour-market argument against a further increase.Fri 9 Oct, 10:00University of Michigan preliminary OctoberLong-run inflation expectations rose to 3.4 percent in September after three months at 3.3. Expectations there are what stop a committee easing early.Tue 13 Oct, 10:00Existing-home sales, SeptemberAugust ran at a 3.98 million annual rate, the lowest of 2026, with the 30-year mortgage rate above 7 percent.Wed 14 Oct, 8:30Consumer Price Index, SeptemberThe largest single event of the month, and the last broad inflation reading the committee sees before it decides.Thu 15 Oct, 8:30Producer Price Index and advance retail sales, SeptemberWhether fuel and freight costs are still entering the pipeline, and whether households are still spending through them.Tue 27 OctDurable goods and new home sales; consumer confidence at 10:00Confidence fell to 81.9 in September from 88.6, a third consecutive decline in the expectations component.Tue 27 to Wed 28 OctFOMC decision, 2:00 pm on 28 OctoberNo projections and no dot plot. The statement and the press conference are the only guidance on offer.Thu 29 Oct, 8:30September core PCE and advance third-quarter GDPThe Fed’s own inflation gauge, one day late to the Fed’s own meeting. Employment Cost Index follows on 30 October.WeeklyEIA diesel price Monday, petroleum status Wednesday, jobless claims and Freddie Mac ThursdayDiesel eased to $6.382 on 28 September, the first weekly fall in the run, still $2.628 above a year ago.
Our Views And What Would Prove Them Wrong In October
Our ViewWhere It StandsOctober Test And What Would Break ItInflation is held up by a supply cost the policy rate cannot reach, so the Fed cannot ease into it.Diesel $6.382 per gallon on 28 September, $2.628 above a year earlier. Long-run inflation expectations 3.4 percent. The committee’s own 2026 core PCE projection is 3.4 percent.September CPI on 14 October, PPI on 15 October. Breaks if core CPI prints 0.2 percent or less on the month and core PCE does the same on 29 October, or if diesel falls below $6.00 in two consecutive EIA reports.The binding constraint on bitcoin is the real return on low-risk assets, not cryptocurrency sentiment.The 10-year real yield reached 2.90 percent on 28 September, from 2.62 on 21 September and 2.44 at the end of August. The 30-year nominal reached 5.59 percent on 29 September.Confirmed if the 10-year real yield holds at or above 2.80 percent into the 28 October decision. Breaks below 2.50 percent, which removes the headwind. Above 3.25 percent it stops being a headwind and becomes a disorderly long end.Any advance has to be carried by spot demand, because financial conditions are not providing it.US spot bitcoin ETFs took in about $2.5 billion net in the three weeks to 29 September. Bitcoin opened the month at $78,627 and traded at $83,553 on 30 September, up about 6 percent while the 10-year real yield rose 46 basis points.Breaks if bitcoin extends through a full week of net ETF outflows, which would mean a different marginal buyer is setting the price and this transmission chain is the wrong one.Market-structure legislation is no longer an October assumption.Senate cloture on the motion to proceed to H.R. 3633 failed 49 to 50 on 15 September, with a motion to reconsider entered. The Senate work period runs 5 October to 6 November.A rescheduled cloture vote is the first real signal, and none is scheduled. Absent one, October carries no domestic regulatory catalyst and positioning that assumed one has to come out.
Bottom Line
October asks the same question twice. The first is 14 October, when September CPI tells the committee whether a cost it cannot reach is still lifting the price level. The second is 28 October, when it must act on that answer without the gauge it targets, which lands the next morning. The transmission into cryptocurrency markets is unchanged: a policy rate held high against supply-driven inflation sustains the real return on low-risk assets, and bitcoin, which pays no cash flow, competes against that return directly. September’s advance happened in spite of that, paid for by the exchange-traded fund and corporate treasury bid. What October settles is not whether the backdrop is hostile. It is whether that bid is deep enough to keep paying for it.
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