Tonight (December 11th, early morning), the Federal Reserve's meeting is set to take place as scheduled.
Interest rate cuts are highly likely. Moreover, this round of cuts does not signify an end; it is merely one of the occurrences within the interest rate cut cycle.
In other words, after this rate cut, the cycle of cuts will not end, and further cuts will follow. Understanding this is crucial, as it indicates a change in trend.
Just like the end of winter, no matter how much the temperature drops, it cannot last long because spring is coming. In early spring, even if the temperature drops, it won't drop much because after spring comes summer.
On the other hand, this interest rate cut is different from the past: this time it is a rate cut after stopping the balance sheet reduction. Stopping the balance sheet reduction means that liquidity is no longer being extracted from the market, and at the same time, the interest rate is cut, which is like icing on the cake. Tonight's meeting is very likely to announce an expansion of the balance sheet, which means starting to inject liquidity into the market, making it icing on the cake with two flowers.
So, when entering the interest rate cut cycle, what to pay attention to is when the rate cuts will completely end, then the entire market entry cycle will begin to change. Currently, there is nothing to worry about, as we are still in the interest rate cut cycle, and it is not the end of the rate cuts.
Therefore, the interest rate cut at this moment is definitely beneficial for the entire financial market and will not be as many people say that 'the benefits falling to the ground are bearish.'
