As we've mentioned several times over the past few days, the printer will be turned back on. Here are the details.

The Fed cut the rate by 0.25%, to a range of 3.5%–3.75%. This brings borrowing costs to their lowest level since 2022. The committee remained divided, with three members continuing to vote against the cut—something that hadn't happened since September 2019. Stephen Miran advocated for a larger reduction of 0.5%, in contrast to Austan Goolsbee and Jeffrey Schmid, who argued for maintaining the rates.

Furthermore, the FOMC indicated that they expect only a 0.25% cut in 2026. Until yesterday, the market expected 2%.

Regarding GDP, the Fed revised its growth forecasts upwards for 2025 (1.7% versus 1.6%) and 2026 (2.3% versus 1.8%). PCE inflation is now expected to be slightly lower this year, at 2.9% (versus 3.0%), and next year, at 2.4% (versus 2.6%). The unemployment rate forecasts were maintained at 4.5% for 2025 and 4.4% for 2026.

However, what shocked many (but not us, who have been widely reporting on this movement in recent days) was the announcement of a $40 billion monthly injection until April 2026, starting this week.

Clearly, the Fed took too long to end QT, and the stress in the liquidity market is already reaching worrying levels.

Bank reserves have fallen significantly, and the SOFR (a type of CDI) has soared above what is normally tolerated.

Although we have stock markets at record highs, commodities skyrocketing, low unemployment, and inflation still out of control, the Fed will inject money.

It's true that it will be much less than during the pandemic. However, as in 2019, when they also started by injecting $300 billion, paving the way for the bazooka that came in 2020.

This should bring favorable winds for risk assets in 2026, and nobody will be able to stop this train.