Is the faucet about to be turned on? Two recent pieces of news have overlapped, and the market just can't sit still.

First, let's talk about the first event—the Federal Reserve officially announced on December 1 that it would stop quantitative tightening. That $6.6 trillion balance sheet is finally no longer shrinking. What does this mean? It means the tightening policy that started in 2022 is now completely on pause; they're even using repo tools to pump money into the market, afraid that liquidity might become an issue. With government debt under pressure and a cash shortage in the market, they're basically providing a safety net.

Now for the second event—White House economic advisor Hassett is increasingly being called to succeed as Fed Chair, with nomination odds soaring above 86%. What's his stance? He's Trump's old partner and a hardcore dove. He's publicly stated that he wants to cut rates immediately, targeting a rate range of 2%-2.5%, and even said he's willing to tolerate higher inflation for the sake of economic growth. Just think about how strong that signal is.

The market is already hyped. Rate cut expectations are close to 90%, 10-year US Treasury yields have dropped below the 4% mark, and both US stocks and cryptocurrencies are surging. The long-term bullish case for Bitcoin is looking clearer, while the dollar is starting to weaken due to narrowing interest rate spreads.

But let's not get carried away. Looser liquidity is definitely good for risk assets, and buying into sensitive US stock sectors or Bitcoin during pullbacks makes sense. But here's the issue—if the Fed's independence gets hijacked by politics, could the fundamental trust in the dollar and US Treasuries be shaken? That's the biggest long-term risk.

The liquidity is indeed coming, but whether you can catch it or if it’ll burn your hands—that’s for you to judge carefully.