Dovish FOMC Outcome and Resilient Price Action Support Continuation Higher

Sean Farrell
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Discussed in today’s video:

  • Yesterday, the FOMC delivered a broadly dovish package that included a 25 bps cut, improved growth and inflation projections, and the start of balance sheet expansion through $40B per month in bill purchases, which came in well above expectations and supports liquidity-sensitive assets.
  • Market pricing remains far less dovish than the Fed’s outlier projections. There is room for rates to reprice lower if Hassett becomes Fed Chair and pulls the committee toward a more accommodative stance.
  • In my view, today’s choppy tape was driven largely by positioning unwinding following Oracle’s earnings miss, but crypto and crypto-equities showed a strong recovery during the afternoon hours.
  • Cross-asset signals align with a constructive backdrop for crypto: small caps outperforming, yields rolling over with the curve steepening, and DXY continues to move lower.
  • Taken together, the setup remains constructive, and the odds favor the recent bounce continuing higher.
Dovish FOMC Outcome and Resilient Price Action Support Continuation Higher

Tickers in this video: BTC 0.44%

Disclosures (show)