Today’s global macroeconomic landscape recap: liquidity expectations repeatedly tug-of-war, and the market has entered a policy-waiting window

The central contradiction of the entire capital market today centers on the clash between rate-cut expectations driven by easing inflation and hawkish statements from Fed officials, alongside geopolitical tensions that raise concerns about a resurgence in inflation. The pricing logic for all risk assets is entirely focused on U.S. dollar liquidity.

1. U.S. inflation data is a positive catalyst, but “easing fantasies” are quickly cooled by officials’ remarks
This week, both the June CPI and PPI released consecutively came in well below market expectations. Inflation has clearly entered a downward channel. For a time, the market priced in the Fed keeping rates unchanged at the July meeting and starting rate cuts in September. The U.S. Dollar Index and the yield on 10-year Treasuries both plunged in tandem, and BTC surged accordingly to break to a new rebound high of 65,588.
However, today the Cleveland Fed Chair publicly issued a tough hawkish stance, stating bluntly that current inflation has not yet met the policy target, that labor-market resilience remains strong, and that there are no near-term conditions for easing and rate cuts to take effect. This directly shattered the market’s excessive overly dovish expectations. The U.S. Dollar Index edged back up to around 100.75, Treasury yields stopped falling and rebounded, and long-duration assets faced collective pressure. U.S. stocks all fell overnight: the Dow dropped 0.77%, the S&P 500 fell 1.01%, and the Nasdaq slumped 1.40%. Even the Philadelphia Semiconductor Index slid directly into a technical bear market, while funds at the high end of AI chips exited in large scale to seek safety.
There was a clear “see-saw” effect across sectors. Funds flowed out of overvalued, crowded high-end tech stocks; part moved into traditional safe-haven assets such as gold and crude oil. Another portion shifted into the crypto market that had seen deep prior pullbacks and had valuations fully digested, providing incremental support for BTC to stabilize slightly during the day
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