$ETH The Federal Reserve's dot plot shows a decrease in interest rate cut expectations, while the macro environment remains tight.
The Federal Reserve's dot plot indicates two rate cuts in 2026 and one in 2027, with rates unchanged in 2028, which means the anticipated "massive liquidity" has not been realized for the time being.
CZ mentioned $BTC , indicating that the super cycle brought by the Federal Reserve's massive liquidity is also no longer valid.
We see that the Federal Reserve has purchased $40 billion in government bonds, and many believe this is an expansion of the balance sheet.
However, this $40 billion belongs to RMP, and its purpose is not to stimulate the economy or actively inject liquidity, but to maintain the minimum reserve safety threshold for the banking system.
This is to prevent the banking system from being stripped too much by factors such as the Treasury's fund disbursement, tax payments, and corporate year-end settlements at the end of the year.
QE = actively expanding the balance sheet, aiming to lower long-term interest rates and increase system liquidity. This is commonly known as injecting liquidity.
QT = actively reducing the balance sheet, aiming to withdraw liquidity and tighten the financial environment.
RMP = entirely different from QE; it is about maintaining the water level and avoiding systemic water shortages.
The essence of RMP is that the Federal Reserve replenishes the water that has been lost, not adding more water to the pool.
So this is not an expansion of the balance sheet; the Federal Reserve has clearly stated two points in its announcement: RMP will maintain a high pace before April 2026 because the Treasury will significantly increase non-reserve liabilities in April, but after April, as seasonal factors disappear, the purchasing scale will quickly decline.
What truly determines liquidity is not RMP, but whether SLR is relaxed, whether banks can expand their balance sheets, whether the Treasury continues to replenish reserves, and whether the Federal Reserve will reduce the scale of ON RRP.
Next, we need to continue to pay attention to the non-farm data on December 16 (November) and the CPI data on December 18 (November).
The non-farm data is likely to be unfavorable because November is the latter part of the U.S. government shutdown, and the economy is significantly impacted.
Focus on the November CPI; if there is no rebound after the rate cuts in September and October, this will reduce obstacles for further easing by the Federal Reserve.
To summarize, the current macro environment is not optimistic, especially as the expectations for the Federal Reserve to inject massive liquidity in 2026 have been dashed.
