Inflation at 2.4%: A Wall Street “Emperor’s New Clothes” Feast?

When the US November CPI data landed at 2.4%, the market reacted as if a starting gun had gone off—US stocks gapped up, gold surged, Bitcoin broke through the $100,000 mark, and social media was instantly flooded with cheers for the “return of the bull market.” But behind this number, is it really a turning point of real value, or just another carefully choreographed collective illusion?

A Cup of “Cooling” Lukewarm Water

From 2.7% to 2.4%, a 0.3 percentage point drop is essentially like a patient with a high fever going from 40.1°C down to 39.8°C—the thermometer looks better, but the patient is still in the ICU. Core CPI remains stubbornly at 3.3%, housing inflation accounts for nearly 40% of the increase, and service sector prices are accelerating month-on-month. All these data point to one fact: the “last mile” of bringing inflation down may be harder than the previous ninety-nine.

The Fed’s interest rate path has never been determined by a single data point. While 2.4% does make the case for further rate hikes weaker, talking about rate cuts, Powell and company still need to see 3-4 consecutive months of stagnating or falling inflation, plus a clear cooling of the labor market. This data at best marks a “pause in rate hikes,” but hoping it will trigger a “liquidity flood” symphony? The conductor hasn’t even received the score.

The “Rate Cut Drama” Spoiled in Advance

The real issue is that this so-called “bullish news” was already priced in by the market in 2024. Since Q4 2023, Wall Street institutions have been heavily betting on a June 2024 rate cut. When that expectation failed, they pushed their bets to September, and later to December. Today’s “celebration” is just the same script being played for the fourth time.

It’s like a shadow puppet show where everyone is in on the secret: the shadow (price) is dancing wildly on the screen, but the strings of manipulation (expectation) are being pulled again and again behind the scenes. By the time the Fed actually presses the rate cut button and the lights come on, the audience may realize—all the surprises were already priced in, and what’s left is just the “sell the news” sickle. Historical data shows that in the past thirty years, within three months after the Fed’s first rate cut, the S&P 500 has actually dropped 5.2% on average, not risen.

Liquidity’s “Open Channel” and “Hidden Drainage”

Even if the Fed really turns on the liquidity tap, the water may not reach the market’s pond. The US Treasury is issuing bonds at a pace of $8 billion per day, with a projected $1.8 trillion deficit for fiscal year 2024. This is like the Fed pouring water in the living room while the Treasury drains it in the kitchen—faster and more aggressively.

More hidden is the shrinkage of the reverse repo market (RRP). The RRP balance has dropped from a $2.3 trillion peak to below $800 billion, meaning the market’s buffer is thinning. If the debt ceiling issue flares up again, or rating agencies strike, the risk of a sudden liquidity reversal will multiply. Those traders cheering the return of liquidity seem to have forgotten how, during the March 2023 Silicon Valley Bank incident, the market switched from “rate hikes forever” to “emergency liquidity” in 48 hours.

Crypto’s “Dead Cat Bounce” Trap

Bitcoin rebounded from $68,000 to $100,000, altcoins generally surged 30%-50%. Looks great. But if you check the positions: exchange stablecoin reserves are down 12%, perpetual contract funding rates spiked to an annualized 60%, and the number of large wallets (>1000 BTC) keeps declining. These signals paint a picture: retail investors are buying out of FOMO, while smart money is gradually exiting.

This isn’t a trend reversal; it’s a classic “short covering + sentiment repair” technical rebound. A real bull market requires sustained institutional inflows, clear and improved regulation, and a confirmed macro easing cycle—none of these three pillars is solid right now.

The 2026 Pie Can’t Satisfy 2025’s Hunger

Most absurdly, some analysts are now selling the story of a “big bull market in the first half of 2026.” This is like a homeless man who’s been hungry for three days studying a Michelin menu instead of looking for bread. From now until Q2 2026, we face: 12 Fed rate meetings, 3 debt ceiling negotiations, 1 US midterm election, and countless geopolitical black swans.

Long-term expectations are an analyst’s fig leaf, not a trader’s shield. If you convince yourself to withstand a 20% account drawdown just because “2026 will be better,” the market may teach you what it means to “die before dawn.”

Consensus Is a Trap, Positioning Is the Trump Card

When “cooling inflation = start of a bull market” becomes social media’s #1 topic, when retail account openings surge by 47%, when the Fear & Greed Index enters “greed” territory—these are not buy signals, but classic “exit lights.”

At this moment, the right thing to do is to open your account and ask yourself three questions:

1. If next week’s CPI bounces back to 2.8%, how much can your positions handle?
2. If the Fed stands pat in March, will your leverage get liquidated?
3. When “rate cut lands” turns into “all the good news is priced in,” do you have a trading plan?

The market never punishes the cautious, only the reckless. The 2.4% inflation data is nothing more than a signpost on a long, perilous road—it tells you “there may be 10 kilometers to go,” not “congratulations, you’ve arrived at your destination.”

Real opportunities are always born from unexpected joy in despair, not from consensus arriving as scheduled. #成长值抽奖赢iPhone17和周边 #十二月行情展望 #十二月降息预测 $BTC ‌$ETH ‌$GT ‌