Brothers, don't be afraid! The Federal Reserve is even more anxious than we are!

If you don't believe it, hurry to the Federal Reserve's official website to check the Fed's balance sheet yourself. Old Powell has actually been shrinking the balance sheet since 2023 to boost the dollar. However, the turning point has come:

1. Lu Dongbin Observation: On February 3, the Federal Reserve executed an expansion of the balance sheet.

But! But! But the turning point came the day before yesterday! A new round of balance sheet expansion started on February 3!

The Federal Reserve hasn't said anything, but in fact, it has already started quantitative easing again, recently starting to buy, buy, buy.

In fact, the Federal Reserve has been reducing asset sales since the end of January, and instead started buying assets. This rhythm is reminiscent of the early pandemic period in 2020; everyone can see the chart themselves.

As shown in the figure above, let's review the historical trend of the Federal Reserve's total asset size for the brothers:

  • Early 2002–2008: Long-term stability around 0.8–0.9 trillion (normal level)

  • 2008 financial crisis → 2014: Rapid rise to about 4.5 trillion (QE1-QE3)

  • 2015–2019: Basically flat at 4.4–4.5 trillion (balance sheet reduction attempts but very small scale)

  • 2020 pandemic → April 2022: Explosive expansion, peak around 8.97 trillion

  • Mid-2022 → mid-2025: Passive balance sheet reduction (QT), slowly decreasing to about 6.5–6.7 trillion range

  • Second half of 2025 → February 2026: Continued slight fluctuations downwards, currently stable around 6.58–6.61 trillion (recently slightly rebounded by about 18 billion)

  • In addition, coming next is my prediction of another round of new balance sheet expansion in 2026!!! So everyone, don't panic, the Federal Reserve is even more anxious than we are!!! Now is the lowest point for asset prices.

Second, Lü Dongbin's judgment: The Federal Reserve will inevitably face an unexpected rate cut before May.

I personally judge that Powell will have a rate cut before May, the logic is the sharp drop in asset prices, in fact, inflation is no longer an issue, combined with the recent employment data, old Powell is actually quite anxious because he is too optimistic, high interest rates + balance sheet reduction, the market is obviously experiencing a liquidity shock, and the problem is indeed with Trump!

Therefore, if old Powell still has his eyes, there will be QE + rate cuts before May!

Third, asset price judgment

Here I want to say one thing, don't panic, $BTC +$PAXG +$BNB , these three asset prices are actually at the bottom, don't panic, buy in grid!

Brothers! Don't let the market scare you, use your own eyes to measure the world!