Thursday’s Fed rate decision: three things to watch closely.

First, the rate cut—the probability has already soared to 86.2%, so it’s basically a done deal. If they cut as expected, the market reaction shouldn’t be dramatic since it’s already priced in.

The real suspense is in the dot plot. Wall Street is currently betting on two rate cuts next year, but will Powell and his team send a more aggressive signal? If the dot plot shows more cuts than expected, that’s a solid bullish sign; conversely, if it’s trimmed down to just one cut, market sentiment could take a hit.

Lastly, don’t forget the balance sheet. The taper has already stopped, so now it’s all about whether the Fed will reverse course and start expanding the balance sheet—injecting more liquidity into the market. If that happens, liquidity will improve immediately, which is a clear bullish signal.

In short, whether or not they cut rates might not be the main point—the key is how they cut, for how long, and whether the purse strings will be loosened.