Delphi Digital: Multiple factors have led to the market experiencing its first positive net liquidity environment since early 2022

BlockBeats news, on December 4, crypto market research firm Delphi Digital posted on social media stating that the Federal Reserve’s rate path for next year is the clearest it has been in years. A further 25 basis point rate cut in December 2025 will bring the federal funds rate down to around 3.5%-3.75%. The forward curve predicts at least three more rate cuts in 2026, and if the path remains unchanged, the year-end rate will drop to the low range of around 3%. But rate cuts are only part of the picture. Quantitative Tightening (QT) ended on December 1. The Treasury General Account (TGA) is planned to be gradually reduced rather than replenished. The Overnight Reverse Repo (RRP) has been completely depleted. These factors together have created the first net positive liquidity environment since early 2022. The Secured Overnight Financing Rate (SOFR) and the federal funds rate have fallen back to the high 3% range. Real interest rates have also retreated from their 2023-2024 peaks. However, there has been no collapse—this is a controlled slowdown, not a sharp policy reversal. 2026 will be a year when policy shifts from being a headwind to a mild tailwind. This environment favors long-duration assets, large-cap stocks, gold, and digital assets backed by structural demand.