Is the Federal Reserve's rate cut window opening? The truth behind the inflation data

【Crypto World】There has been an interesting economic debate recently. U.S. high-level officials, when assessing inflation, used an unconventional method—the three-month moving average—rather than the market’s usual year-over-year data.

From this perspective, the current inflation rate is about 1.6%, which is actually below the Federal Reserve’s 2% target. What does this mean? It indicates that the Fed has more room to cut interest rates.

You see, this is an interesting signal. If the official stance leans toward optimistic expectations of rate cuts, then the liquidity environment might be more relaxed than the market anticipates. The crypto market is particularly sensitive to liquidity—rate cut cycles are often accompanied by ample funds, making risk assets more likely to be sought after.

Of course, this differs from public opinion and mainstream economists’ views. However, policymakers’ attitudes are often more important than public consensus. This detail is worth paying attention to for crypto investors, especially traders betting on a rebound in risk assets.

In simple terms, rising expectations of rate cuts could be a key variable for asset allocation in the coming period.