What happened to SPX the last time One bank after another scraps Fed rate-cut forecasts. Bitcoin doesn't care. surprised the market?

The last major wave of banks scrapping Fed rate-cut forecasts occurred in late September to early October 2022. Multiple banks (Goldman, JPM, BofA) rapidly pulled forward their rate-cut expectations after hotter-than-expected CPI and strong jobs data. SPX reacted with a sharp 8% selloff over roughly two weeks, dropping from 3900 to about 3580 as higher-for-longer rhetoric intensified and VIX spiked above 32.

This time the market reaction has been far more muted. Current SPX price action shows the index holding above key support near 5700-5750 despite the headline. Implied volatility remains relatively contained with VIX in the mid-teens instead of the 30+ zone seen in 2022. This suggests the market had already priced in fewer cuts and is focused more on resilient earnings and AI momentum.

Bitcoin decoupling is not surprising. It is currently driven by its own liquidity and ETF flows rather than short-term Fed rhetoric. For SPX iron condor traders using ALVH, keep wings at 50-70 points wide when VIX is 15-18. Current low VIX environment favors selling 30-45 DTE condors with short strikes 1.5-2 standard deviations out. Tighten wing width to 40 points only if VIX pushes above 20. Position size remains key, risk no more than 1-2% of capital per trade.