Recently, the actions of the Federal Reserve have been quite interesting. The 25 basis point rate cut was in line with expectations, but among the 12 voting members, 3 opposed it, a divergence not seen in five years. Even more intriguing is the dot plot, which suggests that there may only be one rate cut in 2026, with nearly half of the officials directly stating that this time it shouldn't be cut—Powell called it a "preemptive rate cut," implying that inflation remains a concern. Core inflation is stuck at 2.8%, and it seems unlikely to be pushed down further in the short term.

But what really excites the market is elsewhere. The Federal Reserve announced an immediate start to its bond purchase program, immediately injecting $40 billion into short-term government bonds. This is essentially a restart of balance sheet expansion, providing a liquidity "booster shot" to the market.

On the employment front, November added 64,000 jobs, exceeding expectations, but the unemployment rate rose to 4.6%. October was even worse, as a government shutdown directly reduced 105,000 jobs. However, the market still tends to see this as a mild cooling, continuing to bet on two more rate cuts in 2026.

For crypto assets, this is interesting. The preemptive rate cut combined with early balance sheet expansion clearly boosts liquidity expectations, which is a short-term positive for assets like BTC and ETH. But the problem is that inflation remains sticky, and there is significant dissent within the Federal Reserve, so market volatility is likely to increase. Historical patterns suggest that the early stages of an easing cycle are often a lively period for crypto assets, but don’t forget to watch out for a correction after the "good news" has been fully priced in.