Inflation heats up and employment struggles: The Federal Reserve faces a dilemma in its policy at the beginning of the year

2026-01-08 16:32:15

【BlockBeats】The latest data reveals the current contradictions in the US economy. The New York Federal Reserve’s latest monthly survey shows that consumer inflation expectations continued to rise in December—projecting a 3.4% increase in prices over the next year, up from 3.2% in November. However, the employment outlook is deteriorating. Consumers’ assessment of the probability of successfully finding a new job after unemployment has fallen to 43.1%, the lowest on record since the bank began tracking this metric in mid-2013, marking the most pessimistic outlook in over 12 years.

This set of data reflects the internal policy tug-of-war within the Federal Reserve. Hawkish officials are concerned about persistent inflation and believe high interest rates need to be maintained; meanwhile, others prioritize the risks of worsening employment and favor rate cuts to stimulate the economy. The confrontation between these two forces is almost certain to play out as policy hesitation at the upcoming monetary policy meeting later this month. This hesitation has far-reaching implications for the market—affecting both stock and bond valuations and the risk appetite for digital assets, triggering a chain reaction.

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OffchainOracle

· 01-11 12:20

The Federal Reserve is really in a tough spot now. Inflation hasn't been brought under control, and unemployment is adding to the chaos. It feels like hawks and doves are about to clash. People are panicking, with a 43.1% job search probability... the lowest in 12 years. This data is shocking. High interest rates are killing employment, and lowering rates risks reigniting inflation. This situation is truly unsolvable. Basically, no matter what choice is made, it's a loss. The market might get messed up to death. Consumer sentiment has collapsed, which is probably the most frightening part... once expectations turn bad, it's hard to reverse. This month's meeting might again be stuck on indecision about interest rates. Such a policy vacuum is really frustrating.

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StablecoinAnxiety

· 01-11 02:43

Hawk vs. dove clash, small investors trembling in the middle... It's time to bet on the Federal Reserve's mood again.

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MEVEye

· 01-08 17:02

The Federal Reserve is really in a dilemma... Inflation is still hot, and employment is about to collapse. Whether to cut interest rates or not has become a Schrödinger's cat problem.

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airdrop_huntress

· 01-08 16:59

What is the Federal Reserve playing at? They don't want to raise interest rates nor cut them, and the market is being spun around by you guys...

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LayerZeroHero

· 01-08 16:58

What does the fact prove? The Federal Reserve is now a Schrödinger's central bank—saying high interest rates on one hand, but backing down on the other. I have to look at the 12-year lowest employment probability data several times; I always feel there's more behind it...

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SatoshiHeir

· 01-08 16:47

It should be pointed out that this set of data fundamentally reflects the inherent contradiction of the Keynesian policy framework—the issue of sticky inflation was already falsified by Friedman in the 1970s, and the Federal Reserve's delayed response is indeed somewhat slow. Speaking of which, the fact that the employment expectation of 43.1% hit a 12-year low, when compared with on-chain data, actually confirms the fragility of the traditional financial system. As a carrier of value consensus, cryptocurrencies happen to highlight their necessity in this policy vacuum—this is no coincidence.

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