$ETH The latest dot plot from the Federal Reserve, while signaling a dovish stance, clearly indicates only two rate cuts in 2026, one more cut in 2027, and maintaining the interest rate unchanged in 2028—this means that the market's hopes for large-scale monetary easing are completely dashed, and the narrative of a super cycle that CZ talks about naturally loses support.
Recently, the Federal Reserve's $40 billion treasury bond purchase operation has been misinterpreted by many investors as a balance sheet expansion action; in fact, this belongs to RMP tool operations, which are fundamentally different from QE (quantitative easing). QE actively injects liquidity into the market to stimulate the economy, QT tightens monetary policy to withdraw funds, while RMP is merely a “liquidity replenishment” — its core purpose is to safeguard the safety threshold of bank reserves and to hedge against liquidity gaps caused by year-end Treasury funding adjustments, concentrated tax payments, and other factors, and it is by no means injecting incremental funds into the market.
The Federal Reserve has clearly stated: before April 2026, RMP operations will maintain a high scale to respond to the Treasury's new non-reserve liabilities; once seasonal disturbances subside, the scale of bond purchases will quickly retreat. The key factor that truly determines the direction of market liquidity lies in whether SLR rules are relaxed, the willingness and ability of banks to expand their balance sheets, the pace of Treasury TGA account replenishment, and the reduction progress of the Federal Reserve's ON RRP scale.
Next, the market needs to focus on two key sets of data: the November non-farm employment data to be released on December 16 and the November CPI data to be released on December 18. If the CPI does not rebound, it will pave the way for the Federal Reserve's subsequent easing policies; conversely, the policies are likely to continue in a tight balance pattern.
