Insights Chart of the Week

Bullish on Fed Easing?

November 06, 2025

Time to Read: 2 minutes

As expected, the Federal Open Market Committee delivered another 25-basis point rate cut. Investors are now focused on the pace of cuts from here. However, the more important driver of future equity returns is whether the Fed is easing into an economy that is growing or not.

Enlarge

Last week, the Federal Reserve delivered a widely anticipated 25-basis point rate cut. What caught the market’s attention was pushback by Fed Chair Powell on the certainty of a December cut. But, regardless of the pace of easing from here, history tells us that future equity market performance is positive when the Fed eases into a growing economy.

According to our research dating back to the 1980s, stocks delivered an average gain of 16.5% in the 12 months following the first cut of an easing cycle as long as a recession was avoided. The number ticks up to 44.5% over the first 24 months. While the Fed’s easing arguably started last year, we view the latest cuts and future expectations as a new cycle.

Given our outlook for continued economic growth and improving earnings next year, we expect more equity gains to come.

Article | Chart of the Week

Good News on Inflation?

Last week’s Consumer Price Index report, a widely used indicator of inflation in the U.S. economy, showed growth of 3% in September, which was above 2.9% in August but less than expected.

Article | Chart of the Week

Bubble or Is This Market Different?

The market is paying up for future earnings, but are we in a bubble? Not in our view. Higher multiples are the new normal.

Article | Chart of the Week

Positive on Productivity?

After years of stagnation, U.S. economic productivity is on the rise. What does this mean for growth?

Article | Chart of the Week

Earnings Improvement Is Broadening

Earnings growth is broadening beyond big tech stocks, which is typically a positive sign for continued equity gains.

Past performance is no guarantee of future results. This material is provided for illustrative/educational purposes only. This material is not intended to constitute legal, tax, investment or financial advice. Effort has been made to ensure that the material presented herein is accurate at the time of publication. However, this material is not intended to be a full and exhaustive explanation of the law in any area or of all of the tax, investment or financial options available. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation.

The Bank of New York Mellon, DIFC Branch (the “Authorized Firm”) is communicating these materials on behalf of The Bank of New York Mellon. The Bank of New York Mellon is a wholly owned subsidiary of The Bank of New York Mellon Corporation. This material is intended for Professional Clients only and no other person should act upon it. The Authorized Firm is regulated by the Dubai Financial Services Authority and is located at Dubai International Financial Centre, The Exchange Building 5 North, Level 6, Room 601, P.O. Box 506723, Dubai, UAE.

The Bank of New York Mellon is supervised and regulated by the New York State Department of Financial Services and the Federal Reserve and authorized by the Prudential Regulation Authority. The Bank of New York Mellon London Branch is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. The Bank of New York Mellon is incorporated with limited liability in the State of New York, USA. Head Office: 240 Greenwich Street, New York, NY, 10286, USA.

In the U.K. a number of the services associated with BNY Wealth’s Family Office Services– International are provided through The Bank of New York Mellon, London Branch, One Canada Square, London, E14 5AL. The London Branch is registered in England and Wales with FC No. 005522 and BR000818.

Investment management services are administered by BNY Mellon Investment Management EMEA Limited, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1118580. Authorised and regulated by the Financial Conduct Authority. Offshore trust and administration services are through BNY Trust Company (Cayman) Ltd.

This document is issued in the U.K. by The Bank of New York Mellon. In the United States the information provided within this document is for use by professional investors.

This material is a financial promotion in the UK and EMEA. This material, and the statements contained herein, are not an offer or solicitation to buy or sell any products (including financial products) or services or to participate in any particular strategy mentioned and should not be construed as such.

BNY Mellon Fund Services (Ireland) Limited is regulated by the Central Bank of Ireland BNY Mellon Investment Servicing (International) Limited is regulated by the Central Bank of Ireland.

Trademarks and logos belong to their respective owners.

BNY Wealth conducts business through various operating subsidiaries of The Bank of New York Mellon Corporation. BNY is the corporate name of The Bank of New York Mellon Corporation and may be used to reference the corporation as a whole and/or its various subsidiaries generally.

WI-835032-2025-11-05

Let's start a conversation.

Contact Us