Two actions by the Federal Reserve have led many people to reassess the subsequent market trend.

First, the facts: On December 1, the nearly three-year-long quantitative tightening (QT), which had withdrawn $2.4 trillion from the market, officially ended. Almost simultaneously, the Fed injected $13.5 billion into the banking system through overnight repo operations—this is the second-largest single-day injection since the pandemic.

The signal of a policy shift is clear: switching from draining liquidity to supplying it, the underlying logic of the liquidity environment is changing.

What does this mean for the market? In the past, we were trading on the expectation of a “possible policy shift.” Now, we are trading on the fact that “capital is actually starting to flow back in.” The level of certainty is completely different.

Looking back at historical data, Tom Lee from Fundstrat once calculated that after the last QT ended, the market rose about 17% within three weeks. His recent view is even more direct—improved liquidity will directly push up risk assets like Bitcoin, and he even predicts that we may see new all-time highs by the end of January next year.

Of course, it’s too early to draw conclusions based on a single operation. But at least in the short term, the "water level" is indeed rising—this is a visible change.

There is also significant disagreement right now:

Some believe this is just the beginning, and loose liquidity will continue to drive risk assets higher;
Others think it’s merely a technical move—don’t be misled by single data points, a pullback could happen at any time.

What do you think? How far can this round of capital injection go? Or is it just a temporary liquidity fix?