Welcome to the Forward Guidance newsletter, brought to you by Casey Wagner and Ben Strack. Here’s what you’ll find in today’s edition:

• Casey has a Fed Day recap.

• Congress’s spending stopgap bill is here. 

• Exodus made its public market debut Wednesday.

A Santa Powell rally?

The FOMC today, as expected, lowered interest rates by 25 basis points. Committee members cited a commitment to achieving “maximum employment” and getting inflation closer to its 2% target as reasons for the decision. It’s the central bank’s third consecutive rate cut, but projections show committee members expect to slow their pace of decreases in 2025. 

Odds of another 25bps cut in January are now at 82%, according to data from CME Group. 

Committee member projections published Wednesday show the median interest rate target by the end of 2025 falling in the 3.75%—4% range. This is 50bps higher than previous projections showed. 

The FOMC’s forward guidance (see what we did there) from this week’s meeting was mostly unchanged but a key phrase was added: “extent and timing.”

“In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook and the balance of risks,” Wednesday’s statement read. 

It’s the decision we saw coming, so markets shouldn’t be surprised. Still, the “Trump trade,” i.e., the rally we’ve seen across the board since the election, appears to have stalled. Stocks, with the exception of Big Tech, have largely traded sideways for most of the month. 

The S&P 500 is up just 0.2% since Dec. 2. The Nasdaq Composite, meanwhile, has gained around 3.7%. Not too shabby of a return, but still down from November, when the index gained almost 6%. 

What gives? Politics. And I’m not just saying that because I’m writing this newsletter from Reagan International. 

“Since Trump announced several unorthodox cabinet nominations, there has basically been an inverse correlation between cyclical stocks and the likelihood these cabinet nominations get confirmed,” Tom Essaye, founder of Sevens Report Research, said. “Prior to Trump’s announcement of Matt Gaetz as AG, Pete Hegseth as Defense, RFK Jr. as HHS Secretary and Tulsi Gabbard as National Intelligence Director, the market was marching steadily higher.”

The slowing Trump rally has markets poised for a Santa rally, some analysts say. We’re still a few days out from the true “Santa rally window” (the last five trading days of the year plus the first two days of the new year), and with the Fed’s decision coming in as-expected, a breakout in equities and crypto could be imminent. 

The Dow Jones Industrial Average is currently on its longest losing streak since 1978 (nine days), but historically slumps preempt runs, at least the vast majority of the time. As a reminder, this is not trading advice!

The S&P 500 was down 0.6% over today’s session in the moments after the Fed’s decision, the tech-heavy Nasdaq Composite had also lost 0.6% just after 2 pm ET.

— Casey Wagner

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March 18-20, 2025 | NYC | Javits Center North

The number of pro-crypto lawmakers set to occupy the US House and Senate next year.

As Coinbase reminded us in its 2025 outlook, the breakdown is 289 House members and 59 senators deemed crypto-friendly.

Coinbase considers there to be 159 anti-crypto lawmakers in both chambers combined, and 28 that are considered neutral. The pro-crypto majority, Coinbase reiterated, means “the odds of achieving a new legislative milestone are strong.”

Industry insiders have predicted more crypto IPOs in 2025. In a possible preview, today we saw a segment player uplisted to a major exchange.

Shares of crypto wallet provider Exodus became available on the NYSE American stock exchange Wednesday. It was a “finally” moment for the company, which had prepared for this in May before an unexpected delay.

Exodus considers itself “a pure-play crypto company” at a time when more investors seek exposure.

CFO James Gertneztke said access to capital markets could be helpful for product and marketing initiatives, or for buying other companies. 

The focus in 2025 is to launch and (extend the reach of) products that bridge the TradFi-crypto gap (i.e. passkeys and XO Swap), he noted.

“We have a large warchest already so this is not necessarily an immediate impact,” Gertneztke said of the capital markets access. Part of that warchest he’s referring to is a treasury comprising 1900 BTC and 2,660 ETH. 

Exodus has held bitcoin since its 2015 founding. The company receives most of its revenue in BTC and USDC; revenues linked to its exchange aggregator processing record volume in Q4 helped Exodus recently add 100 BTC to its treasury.

“We have no debt, so our holdings are not ‘levered,’” the CFO added. 

The company’s BTC holdings might seem small relative to MicroStrategy’s (439,000 BTC). But 1,900 BTC (currently worth ~$200 million) is nothing to sneeze at, and corporate BTC buying sprees seem poised to continue.

Gertneztke, indeed, made it clear to me: “We don’t plan on stopping in the new year.”

— Ben Strack

In a real 11-hour move, Congressional leaders have unveiled a stopgap bill to fund the government for three more months. 

Should it pass, lawmakers will narrowly avoid a government shutdown. However, the new deadline to agree on a budget would come during President-elect Trump’s crucial first 100 days in office. 

Lawmakers now have until Friday to pass the highly-anticipated continuing resolution, all 1,500 pages of it. The House Rules Committee will have to approve a violation of the 72-hour rule, whereby bill text is released three days ahead of a vote. Over in the Senate, unanimous approval is needed to break procedure for passage before the deadline.

As we’ve written about before, Republicans and Democrats largely agree that a CR is the best way (and at this point, the only way) to avert a shutdown.

Some highlights from the bill:

• $110.4 billion in total disaster aid, most of which would go to southern US states in the wake of hurricanes Milton and Helene. 

• There’s a provision that would give DC control over Robert F. Kennedy Memorial Stadium, an agreement that would help the District bring the Commanders back to the city. 

• A 3.8% “cost of living” increase on Congressional salaries, which currently stand at $174,000.

— Casey Wagner

• SEC commissioners on Wednesday voted to approve the 2025 budget of the Public Company Accounting Oversight Board (PCAOB), which gave the agency around $400 million with no personnel increases. 

• Crypto.com CEO Kris Marszalek met with Donald Trump at Mar-a-Lago this week. They talked about appointments relating to crypto policy, per a Bloomberg report.