According to BlockBeats, research from Citigroup indicates that historically, both U.S. stocks and bonds have shown positive median returns around the time of the first interest rate cut. Stocks typically see a median increase of about 5% within 50 days following a rate cut, although there is a risk of decline in a hard landing scenario. Bonds also benefit from the anticipation and actual implementation of rate cuts, with yields usually reaching their lowest point around the first rate cut.
The U.S. dollar index tends to weaken before a rate cut and then stabilizes into a range-bound pattern afterward. Precious metals like gold often rise ahead of easing policies but tend to trade within a range following an actual rate cut.
Citigroup analysts noted that these historical patterns were largely confirmed in 2024, although bond prices peaked around the first rate cut. At that time, the market's pricing of rate cuts was aggressive, whereas the current cycle's pricing is relatively moderate, alleviating some concerns about the outlook for bonds.