Yesterday's interest rate decision mostly aligned with market expectations, with only some literal interpretations that don't require in-depth analysis. The only thing worth watching is the dot plot. The projected interest rate for 2026 is 3.125%, currently at 3.75%, which indicates expectations of two rate cuts. In other words, the dot plot predicts a 50 basis point rate cut in 2026!

Interestingly, one member hopes for a 125 basis point cut, another for 100 basis points, and two others for a 75 basis point cut. These four members clearly belong to the dovish camp, which is highly consistent with the new government's emphasis on growth policies!

However, there is currently no betting on next year's rate decision. The new Federal Reserve Chair (avoiding sensitive words, so using "Chair" as a placeholder) is likely to announce their decision around Christmas. Most likely, within half a month after Christmas, that will be the real betting on future expectations, as one of the four aggressive members might be named!

Additionally, the Fed's RMP bond purchase expansion is a good thing, but it will take time for reserves to rise above 3 trillion.

The new SLR unbinding regulation will take effect in early April next year, but many banks will start adjusting their asset sides according to the new rules as early as Q1.

The most direct impact will be a gradual downward pressure on long-term bond yields. It won't drop immediately but will be slowly pushed down, with adjustments and digestion happening simultaneously.

The RMP will continue buying short-term bonds, effectively replenishing market liquidity.

The SLR unbinding will also exert downward pressure on long-term bond yields, working together with the RMP.

Both of these processes will take time to materialize. When a clear trend forms, it will probably be around mid to late Q1 or early Q2 next year!

Furthermore, despite yesterday's news stimuli, I still couldn't break through the purple zone I mentioned for half a month. It might as well be renamed the Steel Zone! #BNB #DOYR #OKB