#美联储FOMC会议 On December 10, the entire financial sector was closely watching every move of the Federal Reserve. Whether the Fed would cut rates and how it would do so has become the hottest topic of discussion. I’ve compiled some of the latest market information and data to explain the real logic behind this rate cut.

**A Rate Cut is Set, but the Real Issue Comes After**

Basically, everyone believes the Fed will announce a 25 basis point rate cut today—there’s no suspense about that. But the key is, this rate cut is fundamentally different. In the past, rate cuts were used to stimulate the economy. Now? It’s more about “putting out fires.”

The current situation is a bit complicated. On one hand, the US job market has shown some weakness recently, with November’s ADP employment data unexpectedly declining. On the other hand, the Trump administration’s previous tariff policies have pushed inflation expectations higher, giving the economy a hint of “stagflation.” So, the Fed is cornered—it needs to maintain growth, guard against inflation, and now also deal with liquidity issues.

**The Strangest Phenomenon: Rates Cut but Long-Term Yields Still Rising**

This is the puzzling part. Logically, when the Fed cuts rates, long-term Treasury yields should come down. But what happened? US long-term yields not only didn’t fall, they actually broke above 4.2%. What does this indicate? It suggests there’s actually a shortage of cash in the market, and people are becoming a bit worried about US debt and credit. If the Fed doesn’t step in, the financial system could really run into trouble.

**The Hidden Big Move: Balance Sheet Expansion + Bond Purchases**

More noteworthy than just a rate cut is another potential Fed move—purchasing $45 billion in Treasury bills each month. In simple terms, this means the Fed is restarting the “money printing” mode, directly buying Treasuries and injecting liquidity into the market.

There are two main goals here. First, to prevent repo market rates from spiking. If the cost of banks borrowing from each other soars, the entire financial system could shake. Second, to help relieve pressure on the US government. Treasury auctions are getting bigger, and if no one steps up to buy, government financing becomes difficult. Essentially, this Fed move is about using “liquidity injection” to address systemic reserve shortages.

**What Does This Mean for Us?**

All these actions together mean global liquidity conditions will become looser. This is generally positive for risk assets (including the crypto market). But at the same time, the high US Treasury yields reflect growing concerns about the US fiscal situation. So, this isn’t a straightforward positive—it’s more like a “patch” process, a policy adjustment forced by the need to prevent major issues in the financial system.