Although it's a bit early, I still want to talk about 2026 2025 is coming to an end, and many investors in the market are predicting the trend of 2026. In the current situation, I have divided 2026 into three timelines: Phase 1- January to May before Powell's resignation The reason for this classification is firstly that in the first half of 2026, Powell's impact on monetary policy should still be mainly based on labor data and inflation, and he may not be very concerned about the impact on the economy, but rather on data. Although it will gradually move towards a more relaxed path, it will inevitably be slower. According to the September dot matrix chart, it is very likely that there will be no possibility of interest rate cuts in the first five months under Powell's leadership, or at most one. Of course, the dot plot in December will give us more information, but if the United States is not in recession, the unemployment rate is not very high, and inflation is still hesitant, then it is highly likely to be this main line. Phase 2- From June when the new Federal Reserve Chairman takes office to October before the midterm elections After June, the new chairman of the Federal Reserve must be a trusted member of Trump. It is likely that Trump's plan for rapid interest rate reduction will be followed. For example, Milan, which temporarily replaces Kugler, requested a 50 basis point interest rate reduction at both interest rate meetings, which is the strategy of Trump to fully implement. Although it seems that only Milan is so radical now, Trump's camp still has Bowman and Waller, which is four votes. The Federal Reserve votes a total of 12 people each time, so when Trump can control more than half of the votes, the rhythm will change significantly. Firstly, it is the control of the agenda and wording. Even with a moderate majority of half the votes, the new chairman can lead the post meeting statement and forward guidance, transforming the continued evaluation of employment and inflation progress into further easing if nothing unexpected happens. At the same time, he will strengthen the narrative of high real interest rates and the need to return to neutrality as soon as possible at the press conference. Secondly, there is the path of interest rate cuts. Based on the core votes of Milan, Baumann, Waller, and the new chairman, it is not difficult to gather 1 to 2 votes according to the position of the rotating regional Fed presidents (usually more sensitive to growth), starting from 50 basis points, and then implementing a combination of 25 basis points of interest rate cuts each time. Moreover, if inflation does decline, and the labor data is not very friendly, it is not impossible to cut interest rates even more. After all, the priority in Trump's concept has always been the economy, and as for inflation, it is likely to be put after 2028. This period should be the best time for market expectations, as the transition of the new and old Federal Reserve chairmen is likely to be the beginning of the US entering the path of monetary easing. Phase Three - After the Mid term Elections (November) And the upcoming midterm elections, based on historical data, are both very helpful for the risk market. Although some investors have questioned the market's expectations regarding the risks of the 2018 and 2022 midterm elections, from a macro perspective, both 2018 and 2022 are Federal Reserve interest rate hike cycles, which have a significant impact on liquidity. And even so, the US stock market still has a good upward trend after the 2022 midterm election. The 2026 midterm election is highly likely to be a Fed interest rate cut cycle, with liquidity gradually released and investors' risk appetite gradually opening up. Combined with the bonus of the midterm election, there should be a good opportunity. This article is sponsored by @ Bitget | Save the most transaction fees, receive the most gifts, and become a VIP on Bitget