The Federal Reserve recently implemented a "hawkish rate cut," lowering the interest rate range to 3.75%-4.00%. With limited policy visibility, markets have turned cautious amid a lack of data.Policy Uncertainty The Fed faces a data vacuum due to the government shutdown, leading to diminished rate cut expectations and a flattening short-end yield curve. Decision-making is increasingly driven by liquidity dynamics. Liquidity Distorts Markets Passive funds and quantitative strategies dominate l...

The Federal Reserve recently implemented a "hawkish rate cut," lowering the interest rate range to 3.75%-4.00%. With limited policy visibility, markets have turned cautious amid a lack of data.Policy Uncertainty The Fed faces a data vacuum due to the government shutdown, leading to diminished rate cut expectations and a flattening short-end yield curve. Decision-making is increasingly driven by liquidity dynamics. Liquidity Distorts Markets Passive funds and quantitative strategies dominate l...