For the past few months, everyone has been watching U.S. inflation numbers like a hawk. August came in at 3.1%, September slipped to 3%, October’s data quietly disappeared, and now November inflation has suddenly dropped to 2.6%.
On paper, this looks like a massive win.
The U.S. Federal Reserve has a long-term inflation target of 2%, and suddenly inflation seems to be moving in the “perfect” direction. Naturally, the expectation was simple: lower inflation = rate cuts = liquidity = market rally.
But here’s the real question no one is answering properly:
If inflation is falling so beautifully, why isn’t the market pumping?
Let me tell you — the answer lies behind the numbers, not inside them.
The Trump Factor: Inflation as a Tool, Not a Result
Donald Trump has been vocal lately. Chest out, confidence high, claiming that his tariff policies helped bring inflation down. According to him, tariffs worked, inflation cooled, and the economy responded positively.
But markets don’t run on speeches. They run on credibility.
What many investors are starting to believe is that inflation numbers are being used strategically, not just reported objectively. Trump wants one thing very clearly — lower interest rates. And to justify rate cuts, you need one license: low inflation.
So what do you do?
You show inflation falling.
Whether it’s through calculation tweaks, delayed releases, or later revisions — the game is subtle, but markets aren’t stupid. This is exactly why the market reaction has been muted.
Reason #1: The Market Doesn’t Trust the Inflation Number
The first and biggest reason markets are not rallying is distrust.
Investors are asking:
- Why was October’s inflation data quietly cancelled?
- Why does the drop to 2.6% feel too smooth, too perfect?
- Will this number be revised next month?
If history has taught us anything, it’s this: inflation numbers often get revised later, and markets hate uncertainty more than bad news.
So instead of celebrating, investors are waiting.
Because if today’s 2.6% suddenly becomes 2.9% or 3% later, the entire rate-cut narrative collapses.
Reason #2: Japan Is the Real Silent Threat
While everyone is obsessed with U.S. inflation, Japan is sitting quietly in the background — and that’s dangerous.
As of now, nearly 98% of betting markets believe Japan will hike rates by 25 basis points on December 19. That alone is enough to keep global markets cautious.
But here’s where fear kicks in.
If Japan:
- Raises rates more than expected, or
- Signals future rate hikes clearly,
Then cheap yen liquidity — which has fueled global risk assets for years — could start drying up.
And when Japan tightens, global markets feel it.
This is why traders are nervous. They don’t know whether December 19 will be “manageable” or “market-shaking.”
So Why Isn’t the Market Pumping?
Let me simplify it.
The market isn’t pumping because:
- People don’t trust the U.S. inflation data yet
- Japan’s rate decision could change global liquidity overnight
- Confusion is at peak levels
Low inflation should be bullish — but only when it’s believable and stable. Right now, it feels manufactured, rushed, and politically convenient.
Markets don’t like games.
They like clarity.
Final Thoughts: Watch the Dates, Not the Headlines
This is not the time to blindly chase rallies or panic sell. This is a time to observe, understand, and stay flexible.
December 19 is crucial.
Inflation revisions are crucial.
Central bank language is more important than numbers.
The market isn’t wrong.
It’s just waiting for the truth to catch up with the narrative.
And when that happens — the move will be sharp, in whichever direction it comes.
Disclaimer: This article is for educational and informational purposes only and should not be considered financial or investment advice. Market views expressed are personal opinions.
Abhishek Chouhan
Financial blogger and market analyst with over 10 years of experience covering global markets, macro trends, and investor psychology. Founder of MoneyUncut.
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About the Author – Abhishek Chouhan
Abhishek Chouhan is a Global Finance Analyst and Market Researcher with over 15 years of experience studying stock markets, investor behavior, and long-term wealth cycles across the US, Europe, and Asia. He is the founder of MoneyUncut.com, a global financial intelligence platform focused on decoding market psychology, economic trends, and how human behavior shapes financial outcomes.