The entire market is counting down to rate cuts, but there's one voice worth listening to carefully. Morgan Stanley recently released a report that directly challenges this collective expectation — suggesting that there may be no rate cuts in 2026 at all, and even rate hikes could occur in 2027. At first glance, this sounds like huge news, but looking at these signals, it doesn't seem entirely unfounded.

Let's first break down the inflation hurdle. Service sector prices and wage growth are stubbornly stuck at 3%-4%. On the surface, inflation numbers are declining, but the underlying heat hasn't dissipated. Rushing to cut rates at this point could actually reignite inflation. The Fed's officials aren't fools; they are also calculating these factors.

Next, consider the ticking time bomb of U.S. Treasuries. The $36 trillion scale is no longer just a number game; annual interest payments alone exceed $1 trillion. If rates are cut abruptly, weakening the dollar's attractiveness, the resulting capital outflows and exchange rate volatility could trigger chain reactions. The market already has an answer — the 10-year U.S. Treasury yield remains firmly above 4.4%, and institutional investors' real money is more honest than words.

There's also a bigger contradiction on the table. The current policy idea aims to achieve low interest rates, high tariffs, and a strong dollar simultaneously, but this is fundamentally impossible in economics. Forcing these together will only breed greater market volatility. The "Impossible Trinity" in history constantly reminds us that there is no such thing as a free lunch.

Currently, both the crypto market and traditional financial markets have heavily priced in rate cuts. If the market sentiment suddenly shifts, those unprepared positions could be hit hardest. Have you considered the possibility of such a reversal? At this stage, should you continue to be optimistic about a bull market, or shift to a defensive stance? Or simply hold cash and wait for clearer signals? These questions are worth pondering for every participant.

(This article is for market observation and discussion only and does not constitute any investment advice.)