Talking about the Federal Reserve anchoring inflation at 2%, it sounds simple, but in reality, it’s almost an impossible task.

Why is that? The 2% figure itself is not an economic law, but a narrative woven within the old dollar system. For this explanation to hold, several preconditions must be met: fiscal restraint, smooth global trade, cheap energy prices, a young population structure, and manufacturing that can be outsourced.

But here’s the problem—none of these preconditions currently exist.

What is the current fiscal structure in the United States? The deficit has become rigid, and the debt scale must be slowly absorbed through time and inflation. Under these circumstances, the Federal Reserve is no longer an independent monetary authority; it’s essentially a liquidity adjustment tool for the fiscal system. And what about 2%? It’s just a psychological market signal, impossible to enforce in practice.

Looking deeper, why has US inflation remained so low over the past thirty years? It’s not because the Fed is particularly clever, but because globalization has taken the burden. The manufacturing chains in China, East Asia, and around the world have maintained low inflation and high asset prices in the dollar system through real labor, energy, and environmental costs.

This accounting is becoming increasingly difficult to balance. For risk assets like BTC and ETH, the Fed’s pace of rate cuts and changes in inflation expectations directly influence market liquidity trends.