Against the backdrop of renewed clarity in global liquidity expectations, the crypto market—an asset class highly sensitive to worldwide liquidity conditions—is entering a new narrative phase. This article will take a deep dive into the current inflation structure, the Federal Reserve’s policy trajectory, and, drawing on the latest data from the Gate platform, explore how this "final stage of tariff-driven inflation" may shape the future of digital assets.
The "Final Transmission" of Tariff Inflation: Short-Term Pressures and Long-Term Turning Points
Stephen Douglass’s core insight lies in distinguishing between the "stock" and "increment" of inflation. He points out that although roughly one-third of tariff-related inflationary pressure has yet to be fully reflected in prices—and will gradually pass through in the coming months—this process essentially marks the tail end of the current inflation cycle. This assessment closely aligns with PIMCO’s observations: tariff-driven inflationary pressures are mainly concentrated in goods, with a relatively slow transmission, and this pressure is now steadily diminishing.
Recent economic data backs up this logic. According to the U.S. Bureau of Labor Statistics report on February 13, the U.S. Consumer Price Index (CPI) rose 2.4% year-over-year in January, below the market expectation of 2.5% and marking a new low since June 2025. While core services prices remain somewhat sticky due to one-off price hikes at the start of the year, falling energy prices (down 1.5% month-over-month in January) and declines in goods such as used cars and home furnishings have effectively offset some upward pressure.
Bloomberg Economics analysts note that although businesses typically raise prices at the start of the year, January’s core CPI was noticeably below the historical average, signaling that disinflationary forces are building. This suggests that, while markets may still feel the "peripheral pain" of tariffs in the short term, the longer-term trend for inflation is downward. Once this last batch of tariff transmission pressure is released in the first half of the year, goods inflation will likely, as Douglass predicts, turn negative in the second half.
The Fed’s Policy Dilemma and Rate Cut Path: From "Holding Steady" to "Two Cuts"
A clearer inflation outlook directly shapes the Federal Reserve’s policy room. Douglass believes that current economic performance gives the Fed enough justification to hold rates steady for a while, as the labor market stabilizes and the economy returns to a "soft landing" trajectory. However, this very "stability" lays the groundwork for subsequent rate cuts.
The Fed’s dual mandate is maximum employment and price stability. With the labor market stabilizing (January’s nonfarm payrolls far exceeded expectations and the unemployment rate fell to 4.3%) and inflation trending downward, the Fed’s focus will gradually shift from "containing inflation" to "preventing overtightening."
Lindsay Rosner, Head of Multi-Sector Fixed Income at Goldman Sachs Asset Management, notes that with January’s CPI data not as strong as feared, the Fed’s "normalization" path for rate cuts appears clearer. Market traders have responded swiftly. After the CPI release, expectations for total rate cuts this year rose from 58 basis points to 63 basis points, suggesting the market sees nearly equal odds of two or three rate cuts by year-end.
As for timing, Douglass projects September and December. PIMCO and Goldman Sachs are more optimistic, believing the first cut could come as early as June if inflation continues to improve. Whether the actual timing is June or September, the market consensus is shifting from "if" to "when" the Fed will cut rates. For investors, the key takeaway is the shift in liquidity expectations—U.S. dollar liquidity tightening may have already peaked.
Crypto Market Response: Macro Correlations Revealed by Gate Platform Data
What does a shift in macro liquidity mean for the crypto market? Historically, Bitcoin and other major crypto assets have acted as amplifiers of "macro liquidity." When the Fed cuts rates, the dollar weakens, or real interest rates fall, the opportunity cost of holding non-yielding assets like gold and Bitcoin drops, typically drawing in capital.
According to Gate platform’s latest data from February 14, market sentiment is subtly changing. While prices remain volatile intraday, major cryptocurrencies are generally stabilizing amid favorable macro expectations. As a core asset in the Gate ecosystem, Gatechain Token (GT) also reflects this resonance between macro and micro trends. As of publication on February 14, GT was trading near $7.20, with 24-hour trading volume remaining active.
From the perspective of the price prediction model, most analysis firms hold an optimistic medium- to long-term outlook for GT. This optimism is not only due to its role in empowering the Gate platform ecosystem, but also because, as an asset traded on Gate, GT’s liquidity and valuation are closely tied to the broader crypto market’s fortunes. As the Fed’s rate-cut cycle approaches, the valuation center for risk assets is likely to move higher.
It’s important to note that the impact of falling inflation and rate cut expectations on the crypto market isn’t simply "black or white." In the short term, if the economy achieves a soft landing and corporate profits and household incomes remain steady, more idle funds may flow into crypto markets in search of higher returns. Over the longer term, if Trump administration policies of tax cuts and deregulation combine with a low-rate environment, this could significantly stimulate innovation and entrepreneurship, driving real-world blockchain adoption.
Conclusion
As of February 2026, we may be standing at a pivotal macroeconomic turning point: tariff-driven inflation is reaching its final stage of transmission, and the Federal Reserve is set to begin a new round of rate cuts in the second half of the year. As Stephen Douglass notes, the stabilization of the labor market and the fading aftershocks of inflation are paving the way for a soft economic landing.
For crypto market investors, this is undoubtedly a positive signal. Gate platform data shows that the market is digesting this favorable shift. Gate traders should closely watch the June to September window, as this may mark a key turning point for Fed policy. At the intersection of the final phase of inflation and the start of a rate-cut cycle, crypto assets may be poised for a valuation reset.
