The bond market is shouting, how long can the Fed pretend to be deaf and dumb?

Quantitative easing may come sooner than you think.

Let's take a look at the anomaly: since September last year, the Fed has cut interest rates by almost 150 basis points. It stands to reason that bond yields should follow, right? As a result, the yield on 10-year and 30-year Treasury bonds is now higher than before the first rate cut.

What does this mean? The market is voting with its feet - I feel that the Fed's operation has been screwed up.

But you understand the Fed. They never admit their mistakes, they will only change their posture and continue to do it. Every time they encounter this embarrassing situation in history, their answer is one: restart QE.

This? There will be no exceptions.

Cracks in the economy are beginning to appear. The liquidity problems of small U.S. banks have been worsening, and in December last year, they asked the Federal Reserve for a round of emergency assistance. If you always rely on temporary blood transfusions, it means that the systemic problem has not been solved. What the Fed needs is a long-acting prescription, not a repeated shot in the arm.

How does quantitative easing work? The logic chain is simple:
The Fed buys Treasury bonds → bond prices are pushed higher → yields are suppressed → dollars are weakened → liquidity floods.

For risk assets? This is the perfect combination of punches.

We've seen this script. In the 2020-2021 wave, QE pressed yields to the floor, the US dollar index weakened, and liquidity was like a flood of floods. Risk assets? Take off directly.

Bitcoin went all the way from $3,500 to $69,000. The round of altcoin market is still fresh in people's memories.

Now, history may be repeating the prelude.