🚨 The Liquidity Backdrop Is Shifting — First Meaningful Turn Since 2020
This is not a headline. It’s a macro inflection point that has historically underpinned every major risk-asset cycle of the past two decades.
The Federal Reserve has begun adding liquidity back into the system—subtly, but materially.
Implications: • Financial conditions are easing
• The pace of tightening has stalled
• Risk assets are gaining oxygen
Historical precedent is clear:
When liquidity expands, asset prices follow—equities, crypto, growth, and speculative segments alike.
Not linearly.
Not without volatility.
But the regime shifts from constraint to support.
Context matters.
The past several years were defined by: ▸ Quantitative Tightening
▸ Aggressive rate hikes
▸ Balance-sheet contraction
▸ System-wide liquidity withdrawal
That pressure is now easing.
Key principle:
Liquidity leads. Prices react. Narratives come last.
Most participants will only acknowledge the shift once price action confirms it.
By then, the asymmetry is often gone.
The tide doesn’t announce itself—
it simply turns.
