Federal Reserve's decision early Thursday: Is the 25 basis point rate cut settled? The real highlight is the liquidity operations.

Question

【BitPush】At 3:00 AM on Thursday, the Federal Reserve will announce a new round of interest rate decisions. The market widely expects a 25 basis point cut, bringing the target range to 3.50%-3.75%.

However, this time is a bit interesting—there is a rare divergence within the FOMC, with some voters potentially voting against the rate cut. What’s more troublesome is that due to the government shutdown, key data for October is missing, so the SEP (Summary of Economic Projections) and dot plot are unlikely to change much.

What truly warrants attention is liquidity operations. After the balance sheet runoff ends, will they introduce a “Reserve Management Purchase” (RMP)? Bank of America predicts that starting from January, they might buy about $45 billion in short-term government bonds each month; including MBS reinvestments, the scale could reach around $60 billion.

If RMP is truly announced, this meeting’s focus might shift from the interest rate path to how to manage the balance sheet. For markets sensitive to liquidity, this is what really matters.

DegenMcsleepless · Accepted Answer

A 25 basis point cut is no longer a surprise; the key is how Powell manages the balance sheet strategy.

ForkThisDAO · Answer

A 25 basis point cut has already been written all over the face. The key is when will RMP go up? The scale of 60 billion may or may not be enough; it still depends.

BlockchainBouncer · Answer

A rate cut is basically a done deal, but the level of disagreement this time is quite rare.

RMP is the real focus; with a scale of 60 billion, liquidity will be reshuffled once again.

The government shutdown has wiped out the data, and the Federal Reserve's move is indeed difficult to execute.

MEVSandwichMaker · Answer

Okay, the 25 basis point rate cut has long been decided; the real focus is whether the RMP will come.

If Powell doesn't announce it this time, I'll just laugh to death; liquidity is the key.

FOMC disagreements? Normal, anyway, money still has to be printed.

Starting at 60 billion, now that's a player-level move.

Interest rate path? Uh, it’s really not important, alright.

No data and still holding a meeting, this Federal Reserve is a bit desperate.

If the RMP comes, it's basically a water release; don't talk about balance sheet reduction.

Just want to see the reaction on Thursday morning, most likely another performance.

JustAnotherWallet · Answer

A 25 basis point rate cut has been obvious for a while; the key still depends on how Powell shifts blame onto liquidity...

If RMP really comes, short-term bonds will have to rise, and those shorting will probably go bankrupt again.

Is the FOMC divided? It shows even insiders are panicking; making decisions with such scarce data is just incredible.

A purchase scale of 60 billion sounds significant, but can it withstand stagflation pressure? I have my doubts.

The more dissenting votes from voting members, the more painful it is, indicating that the rate cut cycle is really nearing its end. What’s next?

Liquidity operations are the real drama; interest rates have long lost their appeal.

The balance sheet strategy should be viewed from a long-term perspective; short-term speculation will fade away once over.

GasWaster · Answer

A 25 basis point rate cut was expected long ago, the real black swan is still RMP. With a scale of 60 billion, liquidity will take off again.

BearMarketSurvivor · Answer

A 25 basis point rate cut has long been a certainty; the key is how Powell shifts the blame.

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Once the RMP is implemented, the liquidity chessboard will be completely changed, and we need to reassess the landscape.

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FOMC infighting? Isn't that the norm? I've long been accustomed to it.

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The data gap issue is quite painful—it essentially means decisions are based on guesswork.

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The real game is on the balance sheet; interest rates are just a smokescreen.

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450 billion in short-term debt + MBS reinvestment, the Federal Reserve still isn't willing to tighten.

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Government shutdown harms everyone; the decision-makers are blind.

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Ample liquidity = US dollar depreciation; my short positions are alive again.

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If the SEP dot plot remains unchanged, it doesn't mean much; it all depends on whether the RMP is announced.

GasWastingMaximalist · Answer

Oh no, RMP is coming? So the balance sheet reduction has really ended.

DataOnlooker · Answer

A 25bp rate cut was expected long ago; the real variable is still this RMP, and it feels like Powell wants to hold a big move back.

Federal Reserve's decision early Thursday: Is the 25 basis point rate cut settled? The real highlight is the liquidity operations.

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