BlockBeats news: On January 16, financial markets appeared calm on the surface, but inflation risks were rapidly accumulating at the underlying level of asset pricing. Metal prices continued to hit new highs, AI infrastructure is boosting energy and raw material demand, and the uncertainty surrounding Trump's potential replacement of the Federal Reserve Chair in May has led the market to question whether the previously anticipated two interest rate cuts still have a realistic basis.
Multiple key cost indicators have risen in tandem. Gold and silver have continued their upward trend into 2025, while industrial metals such as copper and steel have become critical bottlenecks for AI and data center construction, providing a "floor" of support for manufacturing, construction, and energy prices. At the same time, geopolitical risks remain unresolved, with U.S.-Iran tensions and concerns over energy supply further amplifying inflation risks at the tail end. Some institutions have already privately adjusted their asset allocations, but these changes have not yet fully reflected in bond and stock prices.
More structural factors stem from the governance level of the Federal Reserve. Markets are widely concerned that a newly appointed chair perceived as having a dovish policy stance could instead undermine the credibility of inflation control. Several Fed officials have already clearly warned that if the central bank's independence is called into question, inflation expectations could quickly spiral out of control, forcing interest rates to remain at higher levels for a longer period.
Bitunix Analyst:
The core market misalignment currently lies in the fact that "growth narratives persist while inflation risks remain underpriced." If the 10-year U.S. Treasury yield effectively breaks above 4.3%, it would signal that inflation concerns have officially shifted from expectations to actual market actions, and the timing and number of rate cuts will inevitably be revised downward. The key issue in 2026 will not be whether monetary easing occurs, but rather whether the Federal Reserve still retains policy dominance in combating inflation.