Global markets caught in the vortex of policy games: Liquidity crisis under false prosperity
Optimistic sentiment in Asia hides dangers
The broad market rally in the Asian session seems to convey positive signals, but in reality exposes the contradictions of global capital flows — risk assets and safe-haven assets rising simultaneously (gold, US Treasuries, and stock indices) essentially reflect the tearing of market consensus. Behind this abnormal resonance is the 'double betting' strategy of capital during periods of policy uncertainty: not daring to abandon short-term arbitrage opportunities under expectations of policy easing, yet instinctively hoarding safe-haven assets to hedge against black swan risks.
Trump team's 'psychological warfare' operation
The collaboration between Bessent and Trump to promote the economy is a classic case of expectation management. Those in power assert that 'a stock market pullback is a healthy adjustment', essentially implanting the psychological suggestion to the market that 'there is no need for policy intervention'. This 'soothing rhetoric' not only fails to boost confidence but also intensifies investors' concerns about the policy side maintaining a tightening stance — US stock futures fell in response, confirming the market's fear of 'higher rates lasting longer'. Interestingly, such remarks come just before the Federal Reserve's meeting, making the intent to guide policy expectations evident.
The Federal Reserve's 'countdown to death' challenge
What the market truly fears is not high interest rates themselves, but a fatal misjudgment by the policymakers regarding economic resilience. If Powell continues to emphasize the established route of 'relying on data' this week while refusing to slow down quantitative tightening, US risk assets may face a liquidity crisis:
The lagging effects of monetary policy are entering a concentrated explosion period, and cracks have already appeared in the corporate bond market.
Global capital continues to migrate from US stocks to the bond market/precious metals, and the crisis pushing up oil prices is reshaping the narrative of declining inflation.
This liquidity crisis triggered by policy arrogance could push the US stock market towards a Minsky moment within 60 days. When decision-makers are obsessed with manipulating market expectations, the real risk is quietly spreading through the capillaries of the economic body.
