Data conflicts, market struggles, and this is precisely the moment when opportunities are brewing.

Over the past week, US economic data has released many complex signals. The CPI year-over-year growth rate suddenly dropped to 2.7%, below expectations, and also hit the lowest level since 2021. Sounds quite positive, but on the other hand, manufacturing is shrinking—New York State manufacturing turned negative directly in December, with new orders index falling to zero.

What does this contradictory picture of "cooling inflation but cold manufacturing" really indicate? Having been in the crypto space for a long time, I can feel that the market sentiment has changed.

**What does CPI cooling open a window for?**

A 2.7% CPI indeed opens a policy door for the Federal Reserve. Slowing inflation means more possibilities for rate cuts, and the market is buzzing about a potential rate cut by the Fed at the end of January—probability estimated at 26.6%. From this perspective, it seems to be favorable for liquidity.

But this is not the full picture. The manufacturing data raises eyebrows. After two consecutive months of growth, New York State's manufacturing suddenly reversed in December, with new orders dropping straight to zero. Economic vitality is clearly declining, and the underlying concerns cannot be ignored.

**Market divergence amid contradictions**

This "hot and cold" scenario maximizes the difficulty of the Fed's decision-making. And most interestingly, even within the Fed, there are voices of dissent—Board member Mester expressed a different view, believing current policies are too tight and that rate cuts should accelerate. This disagreement itself indicates a bigger problem: policy direction is still wavering, and market volatility is likely to increase accordingly.

Crypto markets are becoming increasingly sensitive to these macro signals, not just because of liquidity expectations, but also because the economic outlook behind these data points is becoming more uncertain. Opportunities and risks are often brewing amid this struggle.