One eagle but not as eagle's interest rate cut statement and one necessary expansion. Early this morning, the Federal Reserve cut interest rates by 25 basis points as expected. Let's talk about my personal opinion: 1. The statement on the interest rate resolution reiterated that inflation is still slightly high and the risk of employment decline has increased in recent months, and deleted the phrase "keeping the unemployment rate low". The median expected interest rate in the dot plot remains unchanged from the previous time, indicating that it is expected to cut interest rates once in the next two years, which is lower than the market's expectation of two cuts next year. The economic outlook has raised its GDP growth expectations for this year and the next three years, and slightly lowered its inflation and unemployment rate expectations for this year and next year. The statement in the interest rate resolution regarding the "magnitude and timing" of considering further interest rate cuts actually sets a high threshold for at least three more interest rate meetings during Powell's tenure, and it can even be said that today may be the last interest rate cut during Powell's tenure. 2. Why is it an eagle but not so eagle? It is relative to previous market expectations. Previously, the market expected a hawkish interest rate cut this time, it depends on the severity of the hawkish situation. In fact, upon closer inspection of Powell's speech, it appears to be quite tough but not as strong as the market imagines. 1) He clearly stated that the actual or overestimated employment growth may have turned slightly negative since April, and the labor market is still continuing to gradually cool down, possibly only slightly milder than previously expected; 2) As for the inflation trend, he believes that the United States has made progress in the field of non-tariff inflation, and the downward trend of service inflation is still continuing. The impact of tariffs is expected to gradually subside next year. If the United States does not implement new tariffs, commodity inflation may peak in the first quarter of 2026. 3) It also clearly stated that there are significant internal differences, and the current position of interest rates allows the Federal Reserve to patiently wait and observe how the economy will evolve next. This actually implies that we should remain inactive afterwards. Of course, he also said that 'next time we will raise interest rates' is not a basic assumption of anyone within the Federal Reserve. 3. As we talked in the forward-looking tweet on Monday, the most important thing about this interest meeting is that the Fed will announce the purchase of treasury bond bonds (as long as they are short-term treasury bonds) at this meeting to alleviate the shortage of reserves and whether the repo interest rate is soaring. Today, as expected, the Federal Reserve announced that it will start buying short-term bonds this Friday to maintain sufficient reserves. The New York Fed plans to buy $40 billion in short-term bonds in the next 30 days, and it is expected that reserve management purchases (RMP) of short-term bonds will remain high in the first quarter of next year. It is also because bank reserves have fallen back to the level at the end of 2022, which has forced the Federal Reserve to purchase bonds to expand its balance sheet. 4. What do you think of the future market? 1) Reserve management purchases mainly short-term bonds (the special time point is that treasury bond with a maturity of less than three years can be purchased). The gradual return of bank reserves in the future can improve market liquidity. At present, bank reserves are 2.85 trillion US dollars. Only when reserves rise to over 3 trillion US dollars can we see a substantial improvement in liquidity. Only when reserves rise to over 3.2 trillion US dollars can we say that we will reach a state of abundance and surplus. So it's a good thing for the Federal Reserve to start buying short-term bonds, but it will take time for reserves to recover to over $3 trillion. 2) The upcoming release of a large amount of economic data and major events after the meeting are more worthy of attention: Next week, we will announce the non farm payroll and CPI for November; The December vote on the extension of subsidies for the Affordable Care Act in China will determine whether government shutdown concerns will resurface; On the 18th, the Bank of Japan raised interest rates, which was previously said to have an impact, but the extent should be far less than in July and August last year. https://(x.com)/qinbafrank/status/1997140432938254525? S=46&t=k6rimWSEbo2D2TXolYcM-A Previously, we discussed that the fluctuations in mid month events can be amplified. 3) Going forward, we need to pay attention to the dynamics of the new chairman of the Federal Reserve. This time, the dot matrix chart shows that there will only be one interest rate cut next year, and Powell hinted that he will hold his ground afterwards. However, the new chairman nominated by Trump should be announced at the beginning of next month (early 26) at the latest. At that time, the market may see more about the attitude of the new chairman. The first quarter of next year will be a critical period for the new chairman's nomination to begin affecting market expectations, and the expectation of interest rate cuts may return at that time. This article is sponsored by the meme trading tool http://(xxyy. io) | Fast trading, versatile features, and can be used to monitor on chain wallets @useXXYYio