Currently, two voices are clashing in the market. On one side are investors eagerly anticipating the "two rate cut expectations," and on the other side are warnings from leading institutions like BlackRock—that the Federal Reserve is unlikely to make significant moves in 2026. Behind this divergence actually lies a fundamental difference in understanding the overall macro environment.

The market is focused on the timing of "when to start cutting rates," while truly professional institutions are eyeing the "magnitude and end point of the rate cut cycle"—a significant difference. In simple terms, we may not be experiencing a standard rate cut cycle driven by recession and rapid liquidity release, but rather a normalization process of monetary policy characterized by persistent inflation, slow progress, and high uncertainty.

What does this mean for traders? First, asset prices may have already priced in overly optimistic rate cut expectations, and when these expectations fall short, market volatility could be quite intense. Second, in the long-term context of a generally rising rate center, the attractiveness of cash assets and short-term bonds will last longer—don't rush to all-in on risk assets. Third, every upcoming inflation report and employment data could become a trigger for market movements, as these directly influence the Federal Reserve's policy pace.

The macro game rules in the post-pandemic era have been rewritten. The old cycle models no longer fit, and those still thinking along old tracks are prone to pitfalls.