COINOTAG News reports that, as of December 9, analysts are assessing the Federal Reserve‘s evolving policy stance amid a tightening liquidity backdrop. Observers note that the trajectory of the Fed’s balance sheet—not merely the path of short-term rates—could drive market dynamics in the coming quarters.

Bank reserves have softened, and the SOFR has intermittently tested the upper end of the policy-rate corridor, signaling funding fragility in the U.S. banking system.

Rather than expecting an immediate 25 basis point rate cut, the dominant signal may be policy communications around reserves management and the future balance-sheet framework.

Some strategists, including Evercore ISI, have floated a potential transition toward a Reserves Management Purchase program (RMP), with discussions of gradual balance-sheet normalization and ongoing Treasury purchases as a policy tool—though timelines and specifics remain subject to official guidance.