The Federal Reserve's focus this week is not on interest rate cuts
but rather on the adjustment direction of its $6.5 trillion balance sheet. Behind this are two parallel monetary policies: one influences the wealth effect of the 'asset-rich' class through balance sheet operations, while the other is an interest rate policy aimed at the general public. The former may have a greater actual driving force in the current market.
Market expectations suggest that the Federal Reserve may announce the purchase of short-term Treasury bills at a rate of about $45 billion per month starting in January next year, as part of reserve management. Subsequently, in the first or second quarter of next year, the pace may slow to a purchase scale of $15-20 billion per month. Any related statements will be crucial.
