Risk assets may face stormier conditions if the Federal Reserve cuts interest rates, as expected, on Sept. 17. That’s the message from futures tied to the VIX index, a measure of expectations of volatility in the S&P 500 over the next 30 days.

The index, also called Wall Street’s fear gauge, is calculated in real time from prices of options on the S&P 500, and reflects how much investors expect the market to swing, with higher values indicating greater levels of uncertainty.

The spread between the October VIX futures contract (the next-month contract) and the September contract (the front-month contract), has widened to 2.2%, an extreme level by historical standards, according to data source TradingView. The September contract expires the same day as the Fed meeting.

Meanwhile, the front-month contract trades only at a slight premium to the cash index.

“Cash is fair compared to Sept. … but Sept. is extremely low compared to October futures,” Greg Magadini, director of derivatives at crypto derivatives data analytics firm Amberdata, wrote in the weekly newsletter.

In other words, traders are discounting risk ahead of the Fed meeting, wagering that the rate-cut expectation will keep markets steady as they approach the decision.

The U.S. central bank is expected to lower its target rate by at least 25 basis points when it meets next week, according to the CME’s FedWatch tool. Some market participants are even positioned for a 50 bps reduction.

The October futures, however, tell a different story, suggesting that investors are anticipating increased turbulence once the Fed’s decision is out of the way and rate cuts are priced in.

“The VIX futures for September have priced away risk while October could be ugly … A theme to keep in mind for risk assets in my opinion,” Magadini wrote.

Historically, the VIX has exhibited a strong negative correlation with stock prices, typically rising during bear markets and periods of market stress, while declining when stock prices advance. It means that the potential volatility boom after the Fed decision could be marked by a downswing in equities.

Bitcoin (BTC) is known to closely track the mood on Wall Street, which means that a potential volatility explosion in stocks could quickly spill over into the cryptocurrency market. And like stocks, the turbulent period could be marked by bearish price action.

Since November last year, the correlation between bitcoin’s spot price and its 30-day implied volatility indices has turned negative. Additionally, Bitcoin’s volatility indices — BVIV and DVOL — have recently reached record high correlation levels with the VIX, highlighting bitcoin’s growing alignment with broader market volatility trends.