🚨 The Federal Reserve's Quantitative Easing (QE) is arriving faster than expected! 🚨
The bond market has sent a clear signal: the Federal Reserve can no longer ignore it.
QE is returning for the following reasons:
• Since September 2024, the Federal Reserve has cut interest rates by about 150 basis points.
• Despite this, the yields on 10-year and 30-year Treasury bonds remain higher than pre-first-rate-cut levels.
• The market believes the Federal Reserve has made a policy error.
In every similar situation in the past, the Federal Reserve has never admitted to a mistake, only did one thing: restart QE. This time will be no exception.
Economic cracks are already showing:
• Small American banks are facing ongoing liquidity pressure, frequently seeking emergency support from the Federal Reserve.
• If small banks cannot raise funds on their own, the Federal Reserve will need a long-term solution—and that usually means QE.
The direct effects of QE:
The Federal Reserve buys Treasury bonds → Bond prices rise → Yields fall → Dollar weakens → Liquidity expands
Result: Risk assets are extremely bullish 🚀
Case from 2020-2021:
• QE pushed down yields and the dollar
• Liquidity explosion
• Risk assets experienced historic surges
• BTC rose from $3.5k to $69k, altcoins also saw the most intense increases
Not just banks, major institutions also anticipate the return of QE:
• UBS: Expects to start purchasing about $40 billion in T-bills every period beginning early 2026
• Bank of America: Expected announcement of RMPs increasing bank reserves
• Pressure in the Japanese bond market → Investors sell T-bills → The Federal Reserve will intervene to purchase to lower yields
The global environment also supports the return of QE:
• China easing
• Japan is still easing despite rising yields
• Canada easing
• The Federal Reserve is the last holdout
Once the Federal Reserve joins in, global liquidity will surge sharply.
The return of QE means:
• Bond yields will fall
• The dollar will weaken
• Risk appetite will increase
• More funds will flow into BTC, ETH, and altcoins
The super bullish environment from 2020-2021 may occur again! ⚡🔥#比特币VS代币化黄金 #美联储重启降息步伐 #美SEC推动加密创新监管 #BNBChain生态代币普涨 #币安HODLer空投YB @龙影交易 Lóngyǐng Jiāoyì $BTC
