"Will There Be Massive Monetary Easing in 2026? The Federal Reserve's Dot Plot Has Already Given the Answer"
The Federal Reserve's latest dot plot reveals the upcoming pace: only two rate cuts in 2026, another in 2027, and only by 2028 can we really return to normal interest rates. The widely anticipated "massive monetary easing" scenario now seems almost impossible.
Regarding the Fed's purchase of $400 billion in government bonds, many in the market see it as a "market rescue signal." But in reality, these are two entirely different matters.
The $400 billion is not proactive stimulus, nor is it an expansion of the balance sheet for easing, but rather using the RMP tool to "fill in the gaps" for the banking system. Year-end is traditionally the most difficult time for banks—cash management, tax payments, corporate settlements—all create significant liquidity pressure. This maneuver by the Fed is purely "stanching the bleeding," with the aim of maintaining stability.
Breaking it down makes it clear: QE is "actively adding water," QT is "withdrawing water," so what about RMP? It's "scooping back the water that was spilled." Only filling the holes, not expanding new water. Therefore, this is not a market rescue; rather, it is the Fed managing risk. Furthermore, the tightening trend of RMP will continue until April 2026—because the Treasury needs to prepare funds in advance. After April, as fiscal pressure eases, the amount of Treasury purchases will continue to decrease.
The true control of liquidity has never been RMP, but rather whether SLR is relaxed, whether banks can expand their balance sheets, and whether the Treasury will provide subsidies, in addition to whether the Fed will change the rules governing ON RRP.
Next, there are two sets of data worth closely monitoring:
On December 16, the non-farm employment data for November will be released, which is likely to be quite disappointing— the economic impact from the government shutdown in November is still unfolding.
More critically, January's CPI data. If the CPI does not follow down after the rate cut in October, the Fed might shift to continue shrinking the balance sheet.
In summary: The current market environment is not optimistic. Regarding the imagination of massive monetary easing by the Federal Reserve in 2026, at least based on current data and policy signals, it's best not to hold out too much hope. $BTC #美联储降息
