The results of the Fed meeting will be released early Thursday morning. Here are a few points I think are worth keeping an eye on in advance:

**Rate cut? Pretty much a done deal.**
On the night of November 21, the Fed's number two and three officials both came out and made clear statements, which immediately pulled market sentiment back from pessimism. This move shows the top ranks have already reached a consensus, so the rate cut is basically in the bag.

**Dot plot might bring surprises.**
The September dot plot showed only one rate cut likely in 2026, but in recent weeks many institutions have adjusted their forecasts, generally believing there could be two or three cuts. Goldman Sachs is more aggressive, saying that besides this December cut, at least two more cuts are needed to bring rates down to 3%.

**Bond purchase pace is the real show.**
This is getting the least discussion, but I personally think it's the most critical—will the Fed directly announce short-term bond purchases?

Relying solely on Treasury TGA injections and stopping balance sheet reduction, reserves actually can't return to the "ample" levels of the past three years. At best, they're now "adequate/critical," and liquidity remains tight. To really push reserves back above $3 trillion, or even towards $3.2 trillion, the Fed simply can't do it without buying short-term bonds again.

Williams has hinted several times in November that liquidity injections may start soon, and the New York Fed even held an emergency meeting. Recently, SOFR and TGCR have frequently breached the upper end of the interest rate corridor, indicating reserves are slipping from "loose" to "tight," and going further could lead to actual shortages.

**What will Powell say?**
I guess there will be three main points:

First, will there be more cuts after this one? He'll likely dodge the question and maintain a so-called "cautious" stance.

Second, inflation is still ticking up. Tariff-driven goods inflation may keep pushing CPI higher in the short term, so the tone will definitely lean hawkish.

Third, and most importantly—the bond purchase issue. Whether it's called "Reserve Management Purchases (RMP)" or "term repo operations," the press will definitely press him about tight reserves and soaring repo rates.

Personally, I think the importance of this meeting even exceeds the rate cut itself and the dot plot. Only bond purchases can truly ease market liquidity tightness. Whether this will be announced depends on whether Williams can convince Powell and the voting members.

**The market could go two ways:**

① **No bond purchase announcement:** Reserves remain tight, repo rates could spike at any time, and with a slightly hawkish tone, the market may stay cautious in the short term.

② **Bond purchase announcement:** Liquidity expectations improve, market confidence gets a boost, and it's positive for risk assets. But the impact will definitely be much less than real QE—don't expect too much.