December 5, 2025 07:00 AM GMT US Economics Weekly | North America It's beginning to look a lot like a rate cut We now expect a 25bp cut at the Dec Fed meeting, followed by two more 25bp cuts in Jan and Apr. The cut will likely be accompanied by messaging of a higher bar for cuts moving forward. Initial Black Friday reporting was better than feared, but we still expect slower real spending growth in 4Q. M Exhibit 1: We expect cuts in Dec, Jan, and Apr to a terminal target range of 3.0- 3.25% Key Takeaways | ...

Core Insights - The crypto market, particularly Digital Asset Treasury (DAT) companies, is experiencing significant turmoil due to macroeconomic fears and rising volatility, leading to sharp declines in Bitcoin, Ethereum, and other digital assets [1][2][3] Market Performance - DAT stocks have seen a drastic decline, with companies that previously traded at multiples of their modified net asset value (mNAV) now trading at or below parity, raising concerns about forced selling to maintain solvency [2][3] - During the summer of 2025, many DATs traded at 3x, 5x, or even 10x their mNAV, but are now hovering around 1x or lower, indicating a severe market correction [3] Potential Outcomes - The market faces two potential paths: a disorderly unwind due to aggressive sell-offs triggered by declining prices, or a recovery if companies hold their balances, supported by an improving macro backdrop and potential rate cuts [3][5] - There is speculation that a rate cut in December could weaken the dollar and ease liquidity stress, potentially leading to a rebound in digital assets [5][6] Industry Evolution - Regardless of a potential recovery, the industry must address structural flaws to ensure long-term viability, as highlighted by industry experts [7]

Investment Opportunities - Cash can still earn standout yields up to 5% before the Fed's expected rate cut [1] - Top savings, CD (Certificates of Deposit), Treasury, and brokerage accounts are highlighted [1]

Information in Investor's Business Daily is for informational and educational purposes only and should not be construed as an offer, recommendation, solicitation, or rating to buy or sell securities. The information has been obtained from sources we believe to be reliable, but we make no guarantee as to its accuracy, timeliness, or suitability, including with respect to information that appears in closed captioning. Historical investment performances are no indication or guarantee of future success or perfo ...

分组1 - The Federal Reserve is expected to cut interest rates, with a majority of investors anticipating a quarter-point reduction in the upcoming policy meeting [22][23][24] - Initial jobless claims in the US fell to 191,000 for the week ending November 29, down from 218,000 the previous week, marking the lowest level since September 2022 [21][22] - Morgan Stanley's chief US equity strategist believes the market is not pricing in enough Fed rate cuts for the next year, suggesting that more aggressive cuts are necessary [23][24] 分组2 - Netflix is reportedly in the lead to acquire Warner Brothers Discovery, indicating a significant strategic shift for the streaming giant [3] - Meta's shares have risen as the company plans to implement significant cuts in its metaverse units, continuing its transition towards artificial intelligence [3][49] - The market is currently experiencing conflicting signals, with strong earnings figures being overshadowed by concerns over economic data and inflation [11][12][22] 分组3 - The European Central Bank (ECB) is expected to maintain its current interest rates, with no cuts anticipated in the near future despite inflation concerns [29][34] - Structural reforms in Europe are deemed necessary for economic growth, with calls for reducing red tape and improving the business environment [32][34] - The ECB's quantitative tightening measures are being closely monitored, with potential risks associated with liquidity distribution across the Eurozone [36][37] 分组4 - Bitcoin's recent price fluctuations are viewed as part of a maturing market cycle, with expectations for a more constructive macro backdrop for cryptocurrencies [52][66] - Regulatory clarity in the US is driving increased demand for digital asset infrastructure, with banks preparing to integrate blockchain technologies [69][70] - The debate around stablecoins and central bank digital currencies (CBDCs) is ongoing, with differing views on their impact on traditional monetary systems [71][74]

Market Overview - Bitcoin is currently trading around $92,000, struggling to break above $93,000, indicating a lack of clear direction in recent sessions [1] - The one-month chart shows Bitcoin locked in a descending structure since early November, with the latest rebound resulting in a lower high, maintaining a broader corrective pattern [2] - Momentum remains weak, with intraday recovery attempts fading quickly, suggesting thin liquidity above current levels [3] Price Levels and Trends - A break below $91,000 could lead to support at $90,000–$90,500, while reclaiming $93,200 is necessary for bulls to invalidate the short-term downtrend [3] - Large-cap cryptocurrencies showed mixed performance, with Ether trading around $3,150, Solana down 4%, and XRP falling nearly 5% [4] - Market capitalization increased by approximately 1% in the past 24 hours, reaching near $3.2 trillion, indicating a slow recovery after a seven-week downturn [4] ETF Flows and Liquidations - There was a divergence in ETF flows, with spot Bitcoin products experiencing net outflows of $14.9 million, while Ether funds saw inflows of $140.2 million, indicating a rotation of capital from Bitcoin to Ethereum [5] - Liquidation data showed nearly $45 million in long liquidations for Bitcoin and over $103 million in short-side liquidations for Ether, suggesting volatility in the market [5] Macro Economic Factors - U.S. ADP payrolls fell by 32,000 in November, below expectations, indicating a cooling labor market, with futures markets now pricing in a 90% probability of a December rate cut [6] - The dollar index experienced sharp swings as traders adjusted their rate expectations, contributing to increased volatility in risk markets [6] Analyst Insights - An analyst noted that Bitcoin's brief test of $94,000 faced resistance from sellers, suggesting that stronger pushback may not occur until the $98,000–$100,000 range [7]

Economic Growth and Investment - The economy has been growing at a rate of 4% for the last seven to eight months, indicating strong growth and investment capital influx into the United States [3] - The Atlanta Fed predicts a third-quarter growth of 3.8%, which is only slightly lower than previous expectations, demonstrating resilience despite economic challenges [6] - There are currently 7 million job openings in the country, suggesting a strong demand for skilled labor [4] Inflation and Consumer Spending - Inflation has decreased significantly compared to previous levels under the Biden administration, with import numbers showing flat inflation [7] - Consumer spending remains robust, with no signs of weakening, as evidenced by corporate reports indicating strong business performance [8][9] Labor Market Dynamics - The labor market is characterized by high turnover, with 2.5 million people leaving jobs each month, but more individuals are being hired, reflecting a dynamic economy [10] - There is a noted skills gap, where many college graduates may not possess the skills that employers are seeking, impacting employment opportunities [5] Housing Market and Construction - The construction sector has seen flat growth over the past three years, but there is optimism that construction numbers will improve in the coming year [15] - Apartment prices have started to decline by 1% annually due to increased supply, indicating a potential for similar trends in the single-family home market [17][18] Tariffs and Economic Policy - Tariffs have generated revenue for the government, but there are concerns about their long-term impact on prices and voter sentiment ahead of the 2026 midterms [19][21] - There is a proposal to cut payroll taxes as a more effective way to support the middle class, incentivizing both hiring and workforce participation [24][25]

The odds for a rate cut at next week's meeting now 90% according to the bond market. But our next guest says the Fed should not be cutting. Joining us here is former CEA chair Jason Ferman who is now a professor at Harvard Kennedy School was in the Obama administration.It's great to have you Jason. Welcome. >> Great to be with you.>> You do not think the Fed should be cutting. >> Yes. First of all, I don't disagree.They are going to cut next week. >> But they have a dual mandate. They are about onetenth of ...

Core Viewpoint - The market is currently debating the potential for the Federal Reserve to cut rates aggressively, with expectations shifting towards lower rates than previously anticipated [1][2][3]. Rate Expectations - The market is pricing in a terminal rate of 3%, but there are indications that the Fed committee may lean towards lower rates, as evidenced by five members suggesting rates below 3% in the September dot plot [2][3]. - Labor market weakness could further push the Fed to lower rates below the 3% mark, indicating a divergence between market expectations and Fed sentiment [3]. Market Signals - The two-year yield is not trading as low as expected given the terminal rate pricing, suggesting that the market is sending a message about inflation and growth expectations [4]. - Current nominal real GDP growth is around 2%, which should align with the two-year rate, but the market's behavior indicates a different outlook [4]. Equity Market Outlook - The consensus earnings forecast for the S&P 500 for the next year is approximately $300, raising questions about potential price-to-earnings (P/E) ratio movements [5][6]. - There is speculation about whether there will be P/E compression or expansion, with some suggesting that markets could reach valuations above 7000, which may seem excessive [6]. - Despite concerns about equity market valuations, traders appear reluctant to sell, indicating a current lack of compelling reasons to exit positions [7].

Market Overview - The CNN Money Fear and Greed index showed a slight easing in overall fear, moving to the "Fear" zone with a reading of 26.1, up from 23.2 [6] - U.S. stocks closed higher, with the Dow Jones gaining over 400 points, driven by expectations of a rate cut following weaker private employment data [1][4] Employment Data - The ADP report indicated that U.S. private employers lost 32,000 jobs in November, reversing the addition of 42,000 jobs in October and missing forecasts for a 5,000 job gain, signaling a cooling labor market [2] - The S&P Global services PMI decreased to 54.1 in November from 54.8 in October, revised down from a preliminary reading of 55 [2] Company Performance - Microchip Technology Inc. saw a nearly 12% increase in stock price after raising its fiscal third-quarter earnings outlook, marking the best performance in the S&P 500 [3] - Macy's Inc. reported better-than-expected sales and profits for the third quarter [3] - Dollar Tree Inc. also delivered stronger-than-expected quarterly results with healthy sales growth [3] Sector Performance - Most sectors in the S&P 500 closed positively, with financial, energy, and industrial stocks showing the largest gains, while utilities and information technology stocks closed lower [4] - The Dow Jones closed at 47,882.90, up approximately 408 points, while the S&P 500 and Nasdaq Composite gained 0.30% and 0.17%, respectively [4] Upcoming Earnings - Investors are anticipating earnings results from Kroger Co., Dollar General Corp., and Hormel Foods Corp. [5]