The non-farm payroll data at the beginning of January completely disrupted the market rhythm. The added employment in December was only 50,000, and the unemployment rate actually fell to 4.4%. This "ice and fire" combination directly overturned market expectations of rate cuts at the beginning of the year. More dramatically, the data was leaked before the official release, causing a market uproar.

The split within the Federal Reserve is more serious than imagined. The latest policy meeting saw three dissenting votes, and the dot plot showed unprecedented policy disagreements, making the future policy direction uncertain. With Powell's term ending soon, the new chair candidate has become a key variable in global investors' eyes—whoever takes the helm will determine this year's liquidity tone.

Interestingly, although the US stock market hit new all-time highs, an internal rotation has quietly occurred. The enthusiasm for tech stocks has waned, and funds are beginning to flow into materials and utilities sectors, reflecting the market's true outlook on the economy. Meanwhile, emerging markets attracted $256 billion in capital inflows, with Chinese assets becoming the main beneficiaries.

The Federal Reserve has paused its balance sheet reduction, switching to technical bond purchases, and liquidity is surging beneath the surface. However, inflationary pressures have not truly subsided—Bostick's latest warning indicates that inflation may still remain above 2.5% in 2026, meaning the room for rate cuts is far less than expected.

Overall, the reversal of rate cut expectations, geopolitical game-playing, and fiscal pressures are intertwined, making high volatility likely to become the norm. Instead of chasing gains and selling on dips, rational allocation is the way to seize real opportunities amid the chaos.