Interest rate cuts are here! But what exactly did Powell say? In short: first, a scare tactic, then a sweetener. This meeting has two key points, both of which are significant signals:

① Bad news: The latest December dot plot shows that almost no interest rate cuts are expected in 2026! The Federal Reserve anticipates only one rate cut for the entire year of 2026! This is far less than what the market had originally fantasized about, which was a continuous decline. It means: do not expect a wave of interest rate cuts in 2026, there will be almost none.

② Good news: Immediate liquidity injection of 40 billion! The Federal Reserve suddenly throws out a big sweet date: starting this month, buying 40 billion in short-term U.S. Treasuries, directly expanding the balance sheet!

The move is quick, strong, and exceeds expectations, causing a surge in the U.S. stock market and cryptocurrency circles.

But be careful:

The Federal Reserve emphasizes: this is not QE! Not unlimited buying! It is just to address short-term overnight financing tightness, and it will stop at some point next year.

In summary: Powell's operation this time is — "a big stick to dampen your rate cut expectations + a sweet date of 40 billion liquidity injection." The short-term market is excited, but the next meeting will still not cut rates,

Can the rebound be sustained? Beware of profit-taking on good news!