The biggest focus for the Federal Reserve this week: not on interest rate cuts, but whether it will inject new liquidity into the market.

According to Mars Finance, on December 8th, although the market seemed to have already accepted another interest rate cut by the Federal Reserve, pushing US stocks close to record highs last Friday, the real driving force for the bull market in stocks and other risk assets may not come from interest rates, but from the outcome of this week's Fed policy meeting. After quietly halting its balance sheet reduction, the key question is how the Fed will manage its massive balance sheet and whether it will inject new liquidity into the market. Bank of America's global interest rate strategy team stated last Friday that they expect the Fed to announce this week that it will begin purchasing Treasury bills with maturities of one year or less at a rate of $45 billion per month starting in January, as part of a "reserve management operation." Others believe this may take longer, and the Fed will not need to take much action to keep the market running smoothly. Roger Hallam, global head of interest rates at Vanguard Fixed Income Group, expects the Fed to begin purchasing Treasury bills at a rate of $15 billion to $20 billion per month by the end of the first quarter or the beginning of the second quarter of next year. PineBridge's Kelly predicts that the Federal Reserve will cut interest rates again by 25 basis points on December 10, bringing the policy rate down to a range of 3.5%-3.75%, one step closer to the historical neutral rate of about 3% aimed at maintaining stable economic growth. (Jinshi)