Delphi Digital has reported a return to positive net liquidity in the market for the first time since early 2022, driven by several key factors. The Federal Reserve's interest rate path for 2025 is notably clear, with a projected 25 basis point cut by December, reducing the federal funds rate to 3.5%-3.75%. This shift is supported by the end of quantitative tightening on December 1, a gradual reduction in the Treasury General Account, and the exhaustion of overnight reverse repurchase agreements.
The research also highlights that the Secured Overnight Financing Rate (SOFR) and federal funds rate have decreased to the upper 3% range, with real interest rates falling from their 2023-2024 highs. This suggests a 'controlled slowdown' rather than a rapid easing. Delphi Digital anticipates that 2026 will see policy shifts providing a mild tailwind, benefiting long-duration assets, large-cap stocks, gold, and digital assets with structural demand.
Delphi Digital Reports Positive Net Liquidity in Markets for First Time Since 2022
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