Lark Davis, entrepreneur and founder of The Wealth Mastery, said that rate cuts, shifts in Federal Reserve policy, record money market funds, and crypto ETF prospects could fuel a strong fourth-quarter rally. The statement was made on X.
"Q4 is looking primed to be the most explosive leg of the cycle," said Davis. "The markets are pricing in 3 rate cuts for the rest of the year. The Fed ending QT and the Treasury stepping in with QE. The setup is looking filthy bullish."
According to Reuters and the Federal Reserve, U.S. monetary policy in 2025 has shifted toward easing. Markets are anticipating a September interest rate cut after nine months on hold. Additionally, the Federal Reserve has slowed its balance sheet runoff by lowering Treasury redemption caps to $5 billion per month starting April 1. Stocks and bonds have rallied while the dollar weakened, reflecting expectations of a dovish tilt tied to softening labor data. This follows years of quantitative tightening that reduced Fed assets from about $9 trillion to $6.7 trillion.