The rate cut process is getting closer to neutral, with the Federal Reserve expected to cut rates by another 25 basis points on December 10. The policy rate will drop to 3.5%-3.75%, heading towards the historical neutral rate of about 3%.\n\nHowever, don't just focus on the rate cut! This week, the Federal Reserve's real bombshell is the liquidity injection plan! Although the rate cut is basically secure, the market is currently more concerned about how the Federal Reserve will handle its massive balance sheet after stopping the tapering. Whether it injects new liquidity into the market is the key to whether risk assets can continue to soar!\n\nMajor bank forecasts:\nBank of America will start purchasing $45 billion of Treasury bills maturing in one year or less starting in January.\nVanguard will purchase $15 billion to $20 billion of Treasury bills monthly from the end of the first quarter/early second quarter of next year.\n\nIn my view, market logic has changed; previously, everyone focused on rate cuts, but now they need to focus on liquidity injection (buying bonds = more money). If the Federal Reserve starts large-scale purchases of Treasury bills, that means they are directly pouring money into the market!\n\nDiscrepancies create opportunities: Bank of America is optimistic about starting to inject large amounts of money in January, while Vanguard believes it will have to wait until next year. This time difference is the space for us to speculate on volatility.