Recently, the market has been discussing how the Federal Reserve is about to cut interest rates again, but what is truly worth paying attention to may not be the interest rates themselves, but how they are playing with the balance sheet again. First of all, let's talk about the background: Last Friday, the US stock market surged to a near historical high, and everyone regarded it as a certainty to cut interest rates again this week. But this wave of sentiment in the market is more like "early celebration", and the real decision that the liquidity cannot continue to pour in may be when the Federal Reserve starts to buy treasury bond bonds again. Why? Because the Federal Reserve has already quietly slowed down the pace of reducing its balance sheet, which means they are no longer so persistent in continuing to shrink their balance sheet. If we further supplement the reserve of the banking system by buying short-term bonds, it will be a real "turning on the faucet" for risky assets such as the stock market and the cryptocurrency market. The expectation given by Bank of America last week was quite aggressive: they believed that the Federal Reserve may announce directly this week that it will buy $45 billion in Treasury bonds with a maturity of less than one year every month starting from January 2025. This level of operation is essentially a "low-key version of QE", although the name will not be QE, the effect is similar - adding liquidity to the system. However, not all institutions are so radical. Roger Hallam, the global head of interest rates at Vanguard, believes that the Federal Reserve does not need to act so quickly. It can start buying Treasury bonds at the end of the first or early second quarter of next year, and the scale is much smaller, about $15-20 billion per month. As for the interest rate decision, Kelly from PineBridge believes that there will be another 25 basis points cut on December 10th, bringing the policy rate to the range of 3.5% -3.75%, continuing to be close to their recognized "3% neutral rate". This means that the Federal Reserve hopes to slowly bring the economy back to a position that is neither too hot nor hard landing. To summarize: In terms of interest rates, the market is already price in, so there are no major surprises; The real key is when the Federal Reserve will officially resume buying treasury bond bonds and to what extent. If they really reopen the cash gate under the name of reserve management, there may still be a significant market trend to look forward to for major asset classes (especially US stocks and cryptocurrencies) from the end of this year to the first half of next year