The entire market is watching this rate cut, but the truth might be disappointing—the benefits of this move have already been fully priced in.

What's even more dangerous is that when everyone knows there will be a 25 basis point cut (with a probability over 85%), it actually loses its appeal. Financial markets thrive on expectations versus reality, and a result that’s already out in the open often becomes a signal for profit-takers to exit.

🔥 **The Fed Is Making Decisions in the Dark**

What’s risky about this meeting? Because they themselves can’t see the way forward:

The government shutdown has led to a lack of inflation data for nearly two months, which is like driving blindfolded. Even more dramatic is that there’s major internal disagreement—the latest dot plot shows a 6-rate-cut difference among committee members for 2026! With no consensus even internally, how can the market possibly price things in?

💣 **The Real Turning Point: Liquidity Is About to Change**

Don’t just focus on rate cuts—there’s a bigger variable:

The Fed officially stopped quantitative tightening (QT) on December 1, marking the end of the tightening cycle. What comes next is the “balance sheet strategy”—some institutions predict that in 2026, a reserve management program may be launched, injecting $35 billion into the market each month. That’s the true long-term source of liquidity.

Rate cuts are just the appetizer; liquidity injections are the main course.

⚠️ **A More Lethal Trap: Asymmetric Risk**

BTC’s correlation with U.S. stocks has recently broken down, turning negative. What does this mean?

If U.S. stocks plunge due to hawkish signals, crypto could fall even harder; but even if stocks rise, BTC’s reaction could be sluggish, like constipation. Short-term volatility may exceed expectations, while the long-term narrative is still developing.

Right now, the market is betting on what the Fed will do next.