Core Viewpoint - The Federal Reserve's announcement of a $40 billion monthly purchase of Treasury securities exceeds market expectations and is expected to lower borrowing costs while impacting the Treasury market dynamics in the coming months [1][2]. Group 1: Federal Reserve's Actions - The Federal Reserve will initiate a "Reserve Management Purchase" (RMP) program to rebuild financial system reserves and lower short-term rates, alongside reinvesting approximately $14.4 billion in maturing agency debt into Treasury securities [1]. - Analysts expect that these measures will alleviate market pressures accumulated from the Fed's asset reduction over the past months, aiding swap spreads and SOFR-federal funds rate basis trades [1][3]. Group 2: Market Predictions - Barclays estimates that the Fed's Treasury purchases could reach approximately $525 billion by 2026, significantly higher than their previous forecast of $345 billion, with monthly purchases starting at about $55 billion [3]. - Morgan Stanley and TD Securities predict that the Fed will absorb more short-term Treasury securities, maintaining a $40 billion purchase rate until mid-April before slowing to $20 billion [4]. - Wells Fargo anticipates that the Fed will purchase $425 billion in Treasury securities during the 2026 fiscal year, which will constitute a large portion of the net supply from the Treasury [5]. Group 3: Implications for Treasury Supply - The net issuance of Treasury securities by the U.S. Treasury is expected to decrease from a prior estimate of $400 billion to only $220 billion due to the Fed's purchasing actions [3]. - The anticipated net issuance of Treasury securities is projected to drop to $2.74 trillion, reflecting the impact of the Fed's increased buying activity [4].

Group 1: Bitcoin Market Movement - Bitcoin experienced a significant drop after reaching $96,600, falling to $93,778.6, erasing all gains for the year. As of around 7 AM, Bitcoin was down over 1%, trading below $95,000. Multiple cryptocurrencies followed suit with declines [1]. - Current Bitcoin price is $94,437, reflecting a decrease of 1.06%. Other cryptocurrencies such as Ethereum and Solana also saw declines of 2.14% and 1.0% respectively, with Ethereum priced at $3,097 and Solana at $137.7 [2]. Group 2: Liquidation Data - In the last hour, total liquidations amounted to $36.785 million, with long positions accounting for $31.377 million and short positions for $5.408 million. Over a 24-hour period, total liquidations reached $530 million, with long positions at $360 million and short positions at $170 million [3]. Group 3: Federal Reserve Interest Rate Expectations - Market expectations for a rate cut by the Federal Reserve in December have cooled, with the probability of a 25 basis point cut dropping below 50% to 44.4%. The likelihood of maintaining the current rate has increased to 55.6% [4]. - Predictions indicate that the Federal Reserve may not cut rates in December, as stated by analysts from Bank of America and Nomura. The Dallas Fed President emphasized the need for clear evidence of declining inflation before supporting another rate cut [5].

Group 1 - US stock market opened lower, with the Dow Jones Industrial Average down over 0.7%, while the Nasdaq Composite turned positive [2] - The Swiss Federal Council announced a reduction in US tariffs on Swiss products from 39% to 15%, following trade negotiations [3][4] - The Federal Reserve official Schmidt expressed concerns that further rate cuts could have lasting impacts on inflation, indicating a cautious approach to policy decisions [4] Group 2 - Short-term interest rate futures indicate a decrease in the likelihood of a rate cut by the Federal Open Market Committee (FOMC) on December 10, dropping from 67% to 47% [5] - Market volatility has increased due to lowered expectations for a December rate cut and concerns over an artificial intelligence bubble [5]