Group 1 - The article discusses the recent shift in market expectations regarding the Federal Reserve's monetary policy, highlighting that despite previous optimism for rate cuts in December, hawkish statements from the Fed have dampened these expectations [1][3][12] - Michael Hartnett from Bank of America indicates that various asset classes, including cryptocurrencies, credit, and private equity, are showing signs of "liquidity peak," suggesting a tightening of liquidity in the market [2][10] - The article notes that the recent hawkish rhetoric from the Fed has raised doubts about further easing policies in 2026, leading to significant declines in cryptocurrencies like Bitcoin and Ethereum, which reflect the impact of tightening liquidity on risk assets [3][4][13] Group 2 - Hartnett predicts that the current weakness in U.S. bank stocks is signaling a potential shift in Fed policy, similar to the signals seen in December 2018, where continued declines in liquidity-sensitive sectors may force the Fed to adopt a more accommodative stance [4][11] - The article reviews the cumulative 316 rate cuts by global central banks over the past two years, which have fueled speculative behavior in markets, including AI investments and cryptocurrency speculation [5][13] - Looking ahead to 2026, Hartnett anticipates that the Fed will be compelled to initiate a rate-cutting cycle, benefiting long-duration zero-coupon bonds, Bitcoin, and mid-cap stocks, which are sensitive to financing costs [6][11][15] Group 3 - The article highlights Japan's escalating debt crisis, with significant declines in 30-year government bonds and the yen, creating global liquidity concerns [8] - The combination of expansive fiscal policy and negative interest rates in Japan is exacerbating the depreciation of the yen and pressure on government bonds, leading to a challenging policy environment [8][9] - The crisis in Japan may have ripple effects globally, potentially impacting U.S. dollar liquidity and affecting U.S. equities, credit bonds, and cryptocurrency markets [9][10] Group 4 - Hartnett emphasizes that cryptocurrencies, particularly Bitcoin, will serve as a leading indicator for changes in central bank policy, given their sensitivity to liquidity shifts [16][17] - Despite recent declines in cryptocurrency prices, there is a strong expectation for a rebound once the Fed signals a policy shift, as retail investment in cryptocurrencies has surged significantly [17][18] - The limited allocation of institutional investors to cryptocurrencies contrasts with the substantial retail inflow, indicating a strong market anticipation for liquidity easing [17][18]