This Federal Reserve meeting sent mixed signals — tight and loose at the same time, and overall the impact on the market is not significant.

First, the bad news: don’t expect frequent rate cuts
Just look at the dot plot, and you’ll see that the Fed’s expectation for rate cuts in 2026 is only one. What does that mean? It means that next year, there may be only a few rate cut opportunities throughout the year, and liquidity will remain tight. This is a significant difference from the market’s previous expectation of “continuous easing.”

Now, the good news: liquidity has been injected early
The Fed has started buying short-term US Treasuries this month, amounting to $40 billion. The goal is clear — inject liquidity into the market and ease the funding tension in the overnight repo market.

However, a few points to note:
• The action is faster than expected, which can indeed boost market confidence in the short term
• But this is not quantitative easing on a large scale; it’s just buying short-term debt and will stop next year
• In the long run, the monetary environment remains tight

A reminder for everyone:
There may be a short-term rebound, as funds flow in. But don’t be fooled by the temporary surge — the significant cooling of rate cut expectations cannot be ignored for its suppressive effect on future trends. Be especially cautious about chasing high; don’t take the short-term liquidity improvement as a sign of trend reversal.