Exceeding expectations, just now, the U.S. November CPI data has been released. The results are somewhat surprising:

CPI increased by 2.7% year-on-year, far below the market expectation of 3.1%.

Core CPI increased by 2.6% year-on-year, also lower than the expected 3%.

In simple terms, inflation in the U.S. is cooling down much faster than everyone anticipated, and by a significant margin.

Once the data was released, many people's first reaction was: should it rise now? Such good news.

Logically, that makes sense. Rapidly cooling inflation means that the Federal Reserve has more room to cut interest rates next year, and may act more decisively. This is fundamentally good news for global risk assets, especially for Bitcoin and other assets that are extremely sensitive to liquidity.

However, the market is always more complex than you imagine. There are two key points that you must clarify:

First, it's the difference between “expectations” and “reality.”

In the past two months, the market has already priced in the “rate cut expectations,” and the prices might already reflect part of the good news. Now that “reality” has finally caught up with “expectations,” we must be wary of a short-term pullback due to “good news being fully priced in.” This is the classic “buy the expectation, sell the fact.”

Second, it’s the difference between “inflation” and “recession.”

Rapidly cooling inflation is certainly a good thing. But if behind the data, it’s due to a rapid shrinkage in economic demand, then the market will quickly shift from “rate cut euphoria” to “recession concerns.” That would be a different scenario.

So, don’t ask simple questions like “should it rise or fall.”

The real question is: does this data confirm the beautiful story of a “soft landing,” or reveal the hidden worries of a “hard landing”?

For traders, the strategy can be very clear:

If the market interprets it as purely a liquidity boost, then the upward trend is likely to continue.

But if subsequent economic data is weak, prompting recession trades, then after the short-term euphoria, it may just be risk release.

The data is just a fuse; how the market interprets and plays out is the main event going forward. Buckle up, the volatility may have just begun.