The Federal Reserve did indeed cut interest rates, but this time it's very different. More important than interest rate cuts are six key signals. Firstly, this round of interest rate cuts is extremely abnormal and the most aggressive "precautionary interest rate cut" since the 1980s. You should know that since the start of the interest rate cut cycle in September last year, the cumulative decrease has been 175 basis points. Apart from the major crashes of 2008 and 2020, this is the first time we have seen such a significant decline in the economy without a recession. Even more strangely, fiscal expansion is also running wildly. Although GDP is still growing and the economy is not in big trouble, the government is spending money crazily while the central bank is desperately releasing water. This' double acceleration 'has caused great concern in the market. So the yield of long-term bonds has soared to a 16 year high, indicating that investors are concerned about future inflation getting out of control, which is the biggest variable in liquidity in 2026. Secondly, this interest rate cut will have temporary benefits for us. It is equivalent to opening up a channel for capital to flow back. Recently, the market has been relatively sluggish, largely due to the inability of external water to enter - at that time, hawks took turns coming out to blow the wind, and funds dared not move. Now that the faucet is turned on, funds dare to enter risky assets. Thirdly, although the Federal Reserve has lowered interest rates, Powell has left behind a 'backstop'. This is a typical 'hawkish interest rate cut': the face has been lowered, but the inside is raising the threshold for further interest rate cuts next year. Bao's worries are not unnecessary. Firstly, the inflation rate in the United States is still stuck at 2.8%, which is not low; Secondly, after the outbreak of AI, the stabilizing effect of interest rate cuts on employment has been weakened, and companies have accelerated the use of AI to replace human labor after borrowing money. Recently, Amazon, Microsoft, and Meta alone have laid off 60000 employees. The result is that the interest rate cut, which was originally intended to boost employment, actually pushed up unemployment, causing great confusion. Fourthly, how much water will the Federal Reserve release next year? Pay attention to Powell's potential successor - Hassett. As a confidant of Trump, his chances of taking over have skyrocketed to 86%, and his approach is completely different from Powell's: not "managing demand", but "managing supply". Hassett's logic is that high inflation is not because there is too much money on the market, but because there is too little production. So, once Hassett takes office, he is likely to be more resolute in cutting interest rates and unleashing the productivity of AI. The cake has grown bigger, and the problem of unemployment has naturally been solved. Fifth, the US dollar will cut interest rates, but the Japanese yen, as the "main valve" of global carry trades, will raise interest rates on the 19th. Will the two major faucets that determine liquidity, one releasing water and the other pumping water, trigger a major asset shock? Professor Lang said this is a 'black swan event comparable to the subprime crisis', but please rest assured - it won't. Because crises that can be foreseen are not real crises. The yen interest rate hike means that the previous pattern of releasing water has completely changed. Sixth, returning to the dot matrix, there were 9 decision-makers who supported the interest rate cut during this meeting, while there were 3 decision-makers who opposed it. The number of opponents increased by 1 compared to the last meeting. In July, September, October, and December, there were four consecutive interest rate statements with opposing votes, with 2, 1, 2, and 3 votes respectively. Among the three decision-makers who opposed this, one was Milan, who had just been appointed to the Federal Reserve Board by Trump. As the current White House representative, he supports a 50 basis point rate cut and opposes only a 25 basis point rate cut. The other two are Chicago Fed President Goolsby and Kansas City Fed President Schmid, who are inclined to pause interest rate cuts at this meeting. That is to say, there is one more person supporting the suspension of interest rate cuts than last time. The dot plot of future interest rate expectations shows that there may be one interest rate cut in 2026 and 2027, which is consistent with the forecast in September. However, it should be emphasized that the dot plot only represents the attitudes and expectations of the current 19 Federal Reserve officials. This expectation is subject to changes in economic data and the situation, and is not a fixed forecast. In other words, if the brothers think that the Federal Reserve will cut interest rates only once or twice in 2026, they will underestimate Trump's madness.