As Fed rate cut expectations rise, the interest rate spread between stablecoins like USDC and DeFi lending platforms is shifting. Lower Fed rates reduce yields on traditional assets, pushing stablecoin issuers (holding Treasuries) to face narrower margins—USDC rates may drop from current highs (e.g., 5-10% APY). Meanwhile, DeFi platforms, driven by supply-demand dynamics, often maintain higher, volatile rates (8-15% APY). This widens the spread, making DeFi lending more attractive for yield-seekers. However, increased stablecoin supply and risk appetite could compress DeFi rates over time. Historically, post-rate cuts (e.g., 2020), DeFi yields spiked then stabilized. Monitor platforms like Aave or Compound for real-time trends.