fedralreserve

Former New York #FedralReserve trader Joseph Wang, known as The Fed Guy, believes the U.S. central bank could soon reverse course and restart balance sheet expansion before the end of 2025 — a move that could quietly reshape global liquidity conditions. After three years of balance sheet reduction, or “quantitative tightening,” the Fed may no longer have the option to keep draining liquidity from the system without destabilizing short-term rates.

Wang argues that this isn’t about rescuing risk assets, manipulating Treasury yields, or even preventing a liquidity crisis — it’s about control. In his words, if the Fed doesn’t inject fresh liquidity into the financial system by buying securities, it will gradually lose control over short-term interest rates, which are the foundation of its monetary policy framework.

The liquidity squeeze behind the scenes

The pressure stems from two interconnected forces: the Treasury General Account (TGA) and the repo market. As the U.S. Treasury rebuilds its cash balance in the TGA, it effectively pulls liquidity out of the banking system, leaving fewer reserves available in the financial sector. At the same time, the strong demand for repurchase agreements (repos) — short-term loans secured by Treasuries — reflects how tight dollar liquidity has become.

If this continues, Wang expects the Fed to step in and expand its balance sheet by $300 billion to $500 billion per year just to stabilize short-term rates. This move would quietly mark a transition from contraction to neutral or mild expansion, without formally announcing a new round of quantitative easing (QE).

The real motive: control, not stimulus

While some investors interpret potential balance sheet growth as a bullish signal for equities and crypto, Wang clarifies that this is primarily a technical response, not a macroeconomic stimulus. The goal isn’t to inflate asset prices but to keep monetary policy functional — ensuring that the Fed Funds rate remains the central anchor for global dollar liquidity.

However, the market rarely distinguishes motive from effect. History has shown that whenever the Fed expands its balance sheet, even for structural reasons, risk assets benefit indirectly through renewed liquidity and confidence.

A quiet inflection point

If Wang’s projection proves accurate, the Fed could soon enter a new phase of “stealth easing”, where policy normalization quietly gives way to liquidity management. The implications would stretch far beyond U.S. borders — affecting dollar funding costs, emerging market flows, and even crypto liquidity conditions.

As 2025 draws to a close, the story may not be about whether the Fed cuts rates — but whether it quietly turns the liquidity tap back on to preserve control. And when that happens, the market will likely feel the ripple long before the Fed admits it’s easing again.

— A Market Observer

كانت الأسواق بالفعل على حافة الانهيار ولكن استراتيجية ترامب المحدثة للأمن القومي دفعت التقلبات إلى مستويات أعلى. الوثيقة لا تعدل فقط السياسة الخارجية الأمريكية؛ بل تعيد كتابة التوقعات التي شكلت إنفاق الدفاع العالمي لعقود. وشعرت العملات الرقمية بالتأثير أسرع من أي فئة أصول أخرى تقريبًا.
استراتيجية تغير الدور العالمي لأمريكا
الرسالة الأساسية للاستراتيجية الجديدة بسيطة ولكنها ثقيلة:

لن تتحمل أمريكا بعد الآن عبء الدفاع العالمي.
تدعي الخطة أن حلفاء الولايات المتحدة يجب أن يتحملوا مسؤولية أكبر بكثير عن مناطقهم الخاصة، مكررة نفس التحذير الذي قدمه ترامب في الأمم المتحدة العام الماضي. هذه ليست مجرد موقف عسكري، بل هي موقف اقتصادي.