Global Markets Liquidity Returns in a Broken System | US Crypto News
Global markets face structural strain as the US restores liquidity while China deals with deflation and Japan's rising yields threaten capital flows.Summary
Global financial markets are entering a period of structural strain characterized by diverging economic cycles among major economies. The US is quietly restoring liquidity following the end of its Quantitative Tightening (QT), transitioning to Reserve Management Purchases (RMP) which will inject liquidity annually, potentially signaling changing conditions for risk assets. Conversely, China is constrained by an $18.9 trillion local government debt issue and political limitations preventing monetary monetization, leading to persistent deflation and slower growth. Meanwhile, Japan is experiencing a fiscal reckoning as bond yields surge, threatening the stability of its massive holdings of US Treasuries and potentially triggering significant global capital outflows. Analysts warn this 'three-speed financial reset'—US liquidity expansion, Chinese fiscal restraint, and Japanese debt stress—will create a volatile, multi-speed adjustment, with potential cascading effects on credit markets, currencies, and even cryptocurrencies like Bitcoin.
(Source：BeInCrypto)