The Fed's December meeting appeared uneventful on the surface, but in fact, it delivered three heavy blows.

First, let's look at the actions on the table: interest rates remain unchanged, the dot plot is hawkish, and Powell continues his rhetoric of "acting on data, not in a hurry to cut rates." This tactic is actually a smokescreen.

The real bombshell lies at the end of the statement — starting from January 2025, the pace of balance sheet reduction will be cut in half. Monthly reductions in U.S. Treasury securities will be slashed from $25 billion to $5 billion, and MBS will also shrink significantly, effectively leaving nearly $40 billion more in the market each month. Wall Street has already caught wind of this: this is a disguised easing, and good days for risk assets are on the way.

The third signal is more straightforward. Powell admitted that Trump's tariff policy will likely raise inflation, which is equivalent to giving the market a reassurance in advance—don't expect to return to the era of high interest rates.

The data is also confirming this direction. In November, non-farm payrolls only increased by 134,000, and wage growth has slowed; the ISM manufacturing index has been below 50 for eight consecutive months, and the services sector has dropped to 48.9; consumer confidence expectations have returned to 2022 levels. Adding to this is Trump's set of tariffs, manufacturing repatriation, and fiscal expansion, which basically solidifies a low-interest environment. Powell has 5 months left in his term, and the new chairman candidates lean dovish, with the market already pricing in the scenario of "interest rates dropping back to 2% by 2026."

Last night's crash was mainly due to weekend liquidity exhaustion + high-leveraged long positions being liquidated: BTC once fell below 86000, ETH broke through 2800, and XRP plummeted to a low of 1.92, with over 870 million dollars liquidated across the network in 24 hours. However, on-chain data is very healthy — the exchange's BTC inventory has hit a 5-year low, large holders are buying in the 84000-86000 range, and institutions have accumulated over 12,000 BTC.

Short-term fluctuations are unavoidable, but the medium-term direction is clear: the liquidity valve is opened, low interest rates are restarted, and risk assets are entering a new valuation cycle. Rational allocation is key; don't chase high prices or panic sell during downturns. Real opportunities often hide when the market is most fearful.