Bitunix Analyst: Central banks worldwide are beginning to halt forecasts simultaneously, and the market has officially entered a stagflation pricing phase

BlockBeats News, May 1 — The true change in the market is no longer which central bank raises or cuts interest rates, but that major global central banks are beginning to enter a “wait-and-see mode” simultaneously. The Federal Reserve, the European Central Bank, and the Bank of England are all holding steady, but unlike in the past, none of them are clearly indicating the future direction.

The reason is actually quite straightforward — after energy prices spiraled out of control again, inflation and the economy are moving in opposite directions simultaneously.

The US GDP growth rate in the first quarter was only 2% annualized, below expectations, but the March PCE year-over-year increase rose to 3.5%, the highest in nearly three years; the Eurozone GDP was almost stagnant, but inflation also rose back to 3%; the Bank of England even hinted that future rate hikes might be necessary again. This indicates that the global economy is gradually entering its most troublesome phase: growth is slowing down, but inflation is reigniting due to energy issues.

More importantly, the market is now beginning to realize that Middle Eastern risks may not be truly resolved in the short term. Although US officials claim “hostile actions have ended,” Trump also said that a ceasefire agreement might be broken, Israel warned of possible renewed action against Iran, and the actual blockade and military pressure in the Strait of Hormuz remain unresolved. This suggests that the current ceasefire is more like a temporary postponement of conflict rather than the true disappearance of risk.

Therefore, global central banks are now caught in the same dilemma: continuing to maintain high interest rates will further cool the economy; but cutting rates too early could cause oil prices and supply chain pressures to reignite inflation.

This is also why, despite recent AI and big tech stocks continuously driving the US stock market higher, even with Alphabet soaring 10% in a single day, the bond market has started to reprice another issue — that high interest rates may stay longer than the market initially expected. Recently, US Treasury yields have risen again, fundamentally reflecting the market’s reassessment of “stagflation risk.” For the crypto market, BTC still benefits from risk asset preferences and institutional capital inflows, but if global markets shift from a “soft landing” back to a “stagflation trade,” the volatility of high-valuation assets could significantly increase. Especially when the market begins to doubt whether the Fed has lost room to cut rates and lacks clear direction, liquidity expectations will once again become the biggest source of risk for risk assets.