2025-12-26 12:27:16

Looking at the recent trends in inflation swaps is quite interesting. The short-term one-year data has been continuously declining, with the blue line dropping downward. But on the other hand, the long-term inflation expectations are actually climbing, with the green line getting higher and higher. This divergence between the two directions is quite rare.

What does this imply? Simply put, it suggests that short-term inflation may ease in the first half of 2026, leaving room for the Federal Reserve to cut interest rates. The problem is, once rate cuts begin, liquidity will increase again. With more money in the system, by the end of 2026 and into 2027, inflation risks could re-emerge.

In plain terms, there is an opportunity to cool down the economy now, but hidden dangers remain. In the long run, the inflation ghost has not been completely dispelled, and the market needs to stay alert.

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GasFeeAssassin

· 5h ago

This is the classic "covering one's ears to steal a bell." Short-term cooling off is just a temporary relief and doesn't solve the fundamental problem. Lowering interest rates and easing liquidity will just repeat the cycle—it's a vicious circle. The opportunities in 2026 and the pitfalls in 2027—it's time to think carefully about how to respond.

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GateUser-74b10196

· 6h ago

This move is just robbing Peter to pay Paul; the Federal Reserve is digging a hole for itself to jump into.

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TaxEvader

· 6h ago

Is this cycle again? Rate cuts → liquidity infusion → inflation, are we forever stuck in this loop? Short-term relief but long-term potential blowout, the Federal Reserve's move is really a bit desperate. Let's wait and see the show in 2027. The blue line is dropping while the green line is climbing, the divergence is quite intense, it just shows that we know everything but can't do anything about it. The inflation ghost hasn't really gone away; it's just hiding somewhere else. Sooner or later, it will come out to cause trouble again. That's why you have to keep an eye on the market; it will never let you be comfortable for too long. The space in the first half of 2026 is just so-so. What to do in the second half? Still have to keep gambling. Basically, it's just a delaying tactic. The Fed can't fix the problem of treating the symptoms but not the root cause.

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AltcoinMarathoner

· 6h ago

just like mile 20 in a marathon, we're seeing this weird divergence play out... short-term relief but long-term headwinds lurking. the liquidity cycle never really changes, does it? accumulation phase incoming, then boom—inflation ghost returns by 2027. macro perspective says keep stacking, not panicking over these noise cycles.

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retroactive_airdrop

· 6h ago

Really, the inflation swap move looks quite ironic. In the short term, it eases, but in the long term, it comes back again. It feels like just changing the tricks to mess around. When interest rates are cut and liquidity is released, be mentally prepared for another round around 2027. The blue line is dropping while the green line is surging, and this divergence is indeed rare. The market is playing tricks in the betting game.

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FreeRider

· 6h ago

I see through this trick. Short-term interest rate cuts feel good for a while, but then inflation will strike back again.

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