This week’s spotlight was on the Federal Reserve’s first rate cut of the cycle, lowering the benchmark rate by 25 bps and signaling more easing ahead. While the tone was dovish, long-term yields surprisingly spiked, suggesting markets see resilience in the U.S. economy.

For equities and crypto, the backdrop remains constructive: forward earnings revisions are turning positive, liquidity conditions are improving, and institutional flows into digital assets continue. With policy easing on the horizon, risk assets look well-positioned heading into year-end.

Here’s what we’ll cover today:

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At Wednesday’s meeting, the Fed cut its benchmark rate by 25 basis points and signaled that further easing is likely before year-end. The updated dot plot points to two additional cuts in 2025, followed by a gradual decline in rates through 2026–27. However, the dispersion among policymakers highlights uncertainty: while some lean toward a faster easing cycle, others remain cautious, keeping future policy decisions firmly data-dependent on inflation and labor market trends.

Despite the dovish tone, the 10-year Treasury yield spiked from 4.04% to 4.12% within hours of the announcement. This counterintuitive move likely reflects confidence that the economy can withstand higher long-term rates without jeopardizing growth, a sign of underlying resilience rather than fragility.

That resilience is also visible in equities, where U.S. markets continue to outpace the world. The Nasdaq 100 has gained nearly 160% since early 2020, far ahead of international benchmarks. With liquidity conditions improving and policy easing returning, the environment remains highly supportive for risk assets. For crypto in particular, these dynamics continue to drive institutional adoption as investors increasingly view digital assets as both diversifiers and store-of-value alternatives.

Meanwhile, forward earnings revisions for the S&P 500 are turning positive again. Given the historically tight correlation with ISM manufacturing trends, we expect this recovery to strengthen further.

Together, these factors suggest a solid foundation beneath market optimism, reinforcing our expectation of continued upside in both risk assets and crypto as we move into 2026.