The Americans announced the November CPI data a couple of days ago, with an annual rate of only 2.7%, and the actual inflation rate is 2.6%, hitting a new low in over four years. The Federal Reserve's big shot, Goolsbee, who had previously staunchly opposed interest rate cuts, immediately softened upon seeing this data, and honestly stated, "Cut, cut, cut, interest rates will be lowered next year!" In just one week, from firmly opposing to actively softening, this reversal is a signal of policy shift brought about by the CPI 2 era.
CPI is the indicator for measuring price increases, and it reflects the level of price inflation in the U.S. dropping to around 2%. Previously, we have seen news about the U.S. experiencing crazy price hikes and various protests, but now it has finally stabilized close to the Federal Reserve's 2% inflation target.
Speaking of which, what does this have to do with our crypto circle? In 2023, the Federal Reserve began to cut interest rates precisely because inflation was cooling down. Do you remember the scene at that time? Global stock markets surged sharply, with U.S. stocks rising by over 20%, and tech stocks in the A-share market also started rebounding around that time.
If large-scale and high-frequency interest rate cuts begin next year, money worldwide will start flowing to high-yield places, and various stocks, funds, and cryptocurrencies will likely benefit. So, the return of the CPI to the 2 era is a sign that the wind is rising. Although it won’t immediately start to surge, the general direction has already been determined. What we need to do is wait for the wind to come and blow into the crypto circle!