The Fed is really going big this time - directly hitting the "tapering" button starting from December 1!

Since June 2022, this group has been determined to "siphon off," forcefully withdrawing $2.4 trillion from the market, cutting the balance sheet from nearly $9 trillion to $6.6 trillion. Now, suddenly hitting the brakes, do you think this is a signal or a sign of giving up?

# Why stop now?

In short, it's three words: can't hold on.

Economic growth data is starting to weaken, bank reserves are dropping sharply, and various alarm lights in the money market are flashing wildly. But there’s an even bigger issue hidden within — the fiscal deficit. During the pandemic, the Fed bought U.S. Treasuries to "blood transfuse," potentially accounting for more than half of the fiscal deficit. Do you want to continue issuing debt? The cost of government borrowing will soar directly, who can bear it?

The problem is that inflation is still bouncing around at 3%, and employment data is starting to weaken. This tricky operation looks like walking a tightrope no matter how you look at it.

# How will the market move?

In the short term, global liquidity pressure can indeed ease. But don't celebrate too early—Fed assets are still $2 trillion higher than before the pandemic, and this money could flow into various assets at any time, driving up prices.

What's worse is that the U.S. economic data for October has been delayed until December due to the government shutdown, and it is now caught right in the "data vacuum period." With policy swings and information blind spots, how can market expectations remain stable?

# Is the opportunity in the crypto space here?

Historical experience shows that whenever there are expectations of easing, assets like ETH and DOGE often surge first. If the liquidity turning point really arrives, will ( $DOGE and even $ZEC be pushed to the sky by hot money?

But that being said, volatility will definitely be amplified. The Fed hasn't finished its tightrope walk yet, and market sentiment can turn at any moment.

Do you think this wave of operations is the starting gun for a bull market, or is it adding fuel to the bubble?