Powell opens the floodgates? Short-end bond purchases trigger a full ignition of risk assets

1) Rate cut as expected

The Federal Reserve cut interest rates by 25bp, adjusting the rate range to 3.50%–3.75%, marking the third consecutive rate cut and a total of 75bp for the year.

The market had priced this in advance, so the impact is neutral.

2) Clearly dovish stance

The statement weakened the description of "low unemployment rate," emphasizing the slowdown in employment and the rise in the unemployment rate, indicating that the risk assessment is more supportive of employment.

The latest interest rate outlook shows:

2026 median interest rate: 3.4%

2027 median interest rate: 3.1%

This indicates that there is still room for rate cuts in the next two years.

3) The real highlight: Short-end bond purchases bring incremental liquidity

The Federal Reserve will start T-bill purchases from December to ensure ample reserves and stabilize the overnight funding market.

The initial scale is about $4 billion/month

This is a substantial signal of liquidity expansion and is the core driver of the market's rise.

In summary:

The rate cut is not the key; the dovish stance + confirmation of future easing path + technical expansion of the balance sheet are the keys to driving U.S. stocks, gold, and crypto assets to strengthen together. Bullish market confirmed in 2026~