Yesterday's Federal Reserve meeting had two important points:
1. Rate hikes are completely off the table, with one cut each in 2026 and 2027. Some people complain that the cuts are too slow and not enough?
The perspective is narrow; whether rate cuts are useful is not something keyboard warriors can calculate. You only need to focus on the most critical point: next year and the year after still fall within the rate-cutting cycle. The cycle is not over, so liquidity expectations remain, which is the strongest fundamental support for the market.
2. Starting December 13, the monthly repurchase of $40 billion in short-term U.S. Treasury bonds is the real "signal to open the floodgates!"
Previously, liquidity was being withdrawn, and now the tapering will stop in December, directly leading to an expansion of the balance sheet—officially providing liquidity. The floodgates have begun to open. Don't just focus on the 25 basis points rate cut; the real change is in the balance sheet.
Powell's attitude + actual actions indicate the direction has already been made clear: a shift towards easing is already underway.
