The Federal Reserve's actions have sparked a bloodbath in the markets. How long can this wave of operations last?

On January 12th, the Federal Reserve announced a 25 basis point rate cut, bringing the interest rate range to 3.5%-3.75%. This is already the third rate cut in 2025, with a total reduction of 75 basis points. However, New York Fed President Williams' subsequent remark that "there is no urgency for further rate cuts at this stage" instantly turned market sentiment sour.

The reaction in the US stock market was straightforward—Dow Jones rose by 0.38%, the Nasdaq surged by 1.31%, and Chinese concept stocks also took off, with some hitting gains of over 12%. Gold was also active, stabilizing at $4340. Institutions are frantically reallocating assets, fearing to miss this rebound.

But behind this prosperity lies unseen danger: a policymaker advocated for an aggressive 50 basis point rate cut, only to be vetoed and immediately cast a dissenting vote. The Fed's independence is beginning to be questioned, and power struggles are quietly surfacing.

Even more alarming data followed—The dot plot suggests only one rate cut might occur in 2026, inflation remains stubbornly high, and the employment report was sharply revised downward, with 910,000 jobs evaporating. Market influencer Ackman warned that the 2% inflation target could become a thing of the past.

Global capital is watching how the Fed will respond. On one side, the resilience of the RMB shows policy space is gradually opening up. On the other, how long can Williams' "balancing act" last? Is this rate cut cycle an opportunity or a trap? Storms always arrive when the sea is calmest.