The Federal Reserve in 2026 is redefining market rules. On one side is an unprecedented "money printing," and on the other is a clear commitment to rate cuts. This combination is rewriting the game of asset allocation.

Starting with the urgent reserve situation. The latest market survey points to a reality: the reserves in the financial system have fallen below the "moderately ample" warning line. To fix this gap, the Fed officially launched a bond purchase program at the December meeting. Over the next 12 months, the market expects the Fed to buy approximately $220 billion worth of short-term government bonds. More importantly, the pace of implementation—about $40 billion in purchases each month, with two intensive operations in January. This is not a mild adjustment; it is an active release of liquidity.

And the door to rate cuts has already been opened. The meeting minutes revealed this signal: most participants have endorsed a rate cut in December, and there is a consensus that as long as inflation continues to cool down, further policy easing is a natural progression. Although there are some differences on the pace of rate cuts, the dovish stance has been set—what remains is just waiting for inflation data to give the final confirmation.

From balance sheet expansion to rate cuts, from increasing liquidity to lowering financing costs, why is the Fed preparing? Some say it is paving the way for a new bull market, while others believe it marks the official start of an easing cycle. For investors focused on Bitcoin liquidity and crypto market trends, this moment is worth paying extra attention to. The market is pricing in all of this, and a new liquidity cycle may have quietly begun.