Core Viewpoint - The recent "atypical" appreciation of the RMB corresponds to a "quasi-stagflation" environment in the U.S., with a shift in core contradictions from "stagnation" to "inflation" [1][4]. Group 1: RMB Appreciation Dynamics - The RMB's "atypical" appreciation can be broken down into three phases: deterioration of dollar credit (anchoring to the dollar, April to June) → strengthening of easing expectations (anchoring to U.S. Treasuries, July to September) → extreme "K-shaped differentiation" (decoupling phase, October to present) [3]. - The appreciation of the RMB began in Q4 2025, with decreasing explanatory power of the U.S.-China interest rate differential on the RMB exchange rate, and dollar credit (policy uncertainty) not fluctuating as significantly as in Q2 2025 [3]. Group 2: U.S. Economic Environment - The U.S. economy is experiencing a back-and-forth between stagnation and inflation, characterized by a "K-shaped differentiation" where the wealthy experience inflation while the poor face stagnation [4]. - In Q4 2025, the U.S. faced "stagnation risks" (employment) and "inflation expectations" (pressure on U.S. Treasuries), while in Q1 2026, it shifted to "inflation risks" (oil) and "tightening expectations" (pressure on U.S. equities) [4]. Group 3: Exchange Rate Management - The People's Bank of China (PBOC) announced a reduction in the foreign exchange risk reserve ratio for forward sales from 20% to 0%, leading to discussions about whether this indicates a "brake" on RMB appreciation [5]. - Historically, reductions in the foreign exchange risk reserve ratio have corresponded with significant declines in "swap premiums," which lower the costs for enterprises engaging in forward foreign exchange transactions [6]. - The PBOC's shift from a "brake" to a "neutral" management approach reflects a change in focus towards domestic expectations, as the previous "brake" phase coincided with overly optimistic domestic expectations during a global easing phase [7].