According to foreign media analysis reports, the Federal Reserve officially ended its downsizing on December 1. As a result, bank reserves have fallen to a level historically related to tight financing, and guaranteed overnight financing rates have also periodically tested the upper limit of the policy interest rate corridor. These developments indicate that the US banking system is gradually entering a situation of tight liquidity. In this context, the most important signal sent by the FOMC is probably not a 25 basis point interest rate cut, but the direction of its balance sheet strategy. The Federal Reserve is expected to clarify or adopt its implementation statement outlining how it intends to transition to a reserve management purchase plan. According to Evercore ISI estimates, the program may begin as early as January 2026, and will invest about 35 billion US dollars a month to purchase treasury notes, increasing the balance sheet by more than 400 billion US dollars per year.

According to foreign media analysis reports, the Federal Reserve officially ended its downsizing on December 1. As a result, bank reserves have fallen to a level historically related to tight financing, and guaranteed overnight financing rates have also periodically tested the upper limit of the policy interest rate corridor. These developments indicate that the US banking system is gradually entering a situation of tight liquidity. In this context, the most important signal sent by the FOMC is probably not a 25 basis point interest rate cut, but the direction of its balance sheet strategy. The Federal Reserve is expected to clarify or adopt its implementation statement outlining how it intends to transition to a reserve management purchase plan. According to Evercore ISI estimates, the program may begin as early as January 2026, and will invest about 35 billion US dollars a month to purchase treasury notes, increasing the balance sheet by more than 400 billion US dollars per year.