The expectation for a rate cut in December has been hyped up to a fever pitch, with probability data shooting past 80%. But behind this frenzy lie quite a few hidden risks.

Within the Federal Reserve, there’s still internal conflict—while inflation data has indeed decreased, signals of economic weakness are becoming more and more apparent. In this contradictory situation, all predictions become less reliable. What’s even trickier is that the S&P 500 is approaching the critical 6900 level, and the positive effect of a rate cut may have already been priced in. Once the news is officially announced, it’s not hard to imagine a scenario where profit-taking happens en masse.

There’s another odd phenomenon worth noting: despite such strong expectations of a rate cut, long-term US Treasury yields are actually rising instead of falling. What exactly is the market worried about? Is it the return of inflation? Or are debt problems more serious than they appear on the surface?

In terms of strategy, it’s recommended to keep a close eye on the 6880 to 6900 range for the S&P. If it can’t break through, support might drop to around 6700. Once the rate cut news is confirmed, capital will likely flow from large-cap tech stocks to small caps and value stocks, so it’s best to prepare a response plan in advance.

Another clue that many have overlooked: stablecoins are quietly changing the landscape of the US Treasury market. The scale of tokenized Treasuries has already surpassed $7.4 billion, and the growth rate even outpaces traditional stablecoins. Traditional financial giants like BlackRock and Fidelity have already started making moves.

The key driver is the US “GENIUS Act,” which has directly opened up a compliance pathway for stablecoins. This means on-chain Treasuries are no longer a fringe experiment, but a genuinely new track that can connect with the traditional financial system. The logic of capital rotation may play out faster than expected.