The 2026 Global Monetary Realignment: Why Are All Countries Raising Interest Rates Simultaneously—Except China, Which Is Going the Opposite Way with Easing?

Within just half a month, the world’s three major core economies collectively ended their accommodative monetary cycles and shifted toward liquidity contraction. A highly unusual—and deeply thought-provoking—phenomenon has emerged: Global interest rates are rising in unison; liquidity is being withdrawn across the board—yet China alone is moving in the opposite direction, maintaining monetary easing and sustaining a low-interest-rate environment. Many people fail to grasp this counter-cyclical move—and some even mistakenly assume it signals 'more opportunities in the domestic market.' But the true macroeconomic reality is far harsher than appearances suggest: This is not a windfall—it is a forced, reactive maneuver amid global economic misalignment. Understanding this current global monetary scissors effect—the widening divergence in monetary policy—holds the key to understanding why asset prices are stagnating this year, businesses are struggling, incomes are under pressure, and investors are exercising extreme caution. I. The Era of Zero Interest Rates Is Over: The Age of Fundraising on 'Stories' Has Ended For over a decade, the world remained entrenched in an ultra-low-interest-rate, accommodative cycle. Funding costs approached zero; capital markets were flooded with liquidity—fueling the expansion myths of countless Silicon Valley tech firms. Under the old accommodative framework, capital markets did not assess real profitability—they assessed growth expectations. Even enterprises running persistent losses, generating no positive cash flow, and lacking a proven business model could secure continuous funding and push valuations higher—as long as their sector was novel enough, their narrative compelling enough, and their potential large enough. That was an era when capital tolerated bubbles and markets embraced expectations. But starting in the second half of 2026, this valuation logic—operating for over a decade—has been completely overturned. As central banks worldwide aggressively tighten monetary policy, cheap global capital has definitively receded. Liquidity is shifting from abundance to scarcity, and capital market valuation frameworks are undergoing a fundamental restructuring. The last time such synchronized global tightening occurred was in 2022—triggering sharp corrections across global tech assets and widespread deflation of valuation bubbles. This 2026 round of tightening, however, is far more complex—and exerts significantly greater market pressure—than the one four years earlier. II. This Round of Global Rate Hikes: Not Proactive Policy Adjustment, But Reactive, Crisis-Driven Contraction Many mistakenly believe countries are hiking rates because their economies are overheating—and that tightening is a deliberate cooling measure. In fact, the opposite is true: This global tightening is a *reactive*, crisis-driven contraction forced by an energy crisis. Currently, geopolitical tensions in the Middle East remain persistently high. Red Sea and Strait of Hormuz shipping routes are severely disrupted, drastically undermining the stability of the global energy supply chain. Oil supply disruptions have directly pushed up energy-driven inflation—Europe’s energy inflation rate has already breached double digits. Top-tier institutions like Goldman Sachs forecast that energy disruptions caused by geopolitical conflict will persist well into 2027. This means rising energy prices are not short-term volatility—but a medium- to long-term structural pressure. Faced with imported inflationary pressures, overseas central banks simply have no room to cut rates—and can only continue raising rates to combat surging prices. The biggest consequence of this reactive tightening is: The era of globally expensive capital has officially become long-term. III. The Fed Is Trapped in a Dilemma—The Foundation of Global Asset Pricing Has Been Fundamentally Undermined The Federal Reserve currently finds itself in an extremely awkward strategic position. On one hand, inflation is receding slower than market expectations—effectively shutting the door on any near-term monetary easing; its hawkish stance continues to intensify. On the other hand, with the U.S. presidential election cycle approaching, the economy, employment, and financial markets all urgently need liquidity support. One side is runaway inflation; the other is an economy unable to withstand further strain. Behind the Fed’s paralysis lies extreme instability in global asset pricing.

The Global Rate-Hike Surge: The Biggest Macroeconomic Variable of 2026

Why did Silicon Valley spawn countless unicorn startups valued at astronomical sums over the past decade? Why could companies post massive annual losses yet still raise enormous funds and see their valuations skyrocket? Because for over a decade, the world lived in a zero-interest-rate era of massive liquidity flooding! Money flowed like tap water—freely and abundantly! Back then in Silicon Valley, you didn’t need to know how to make money—you just needed to know how to tell a story. Unclear business models? No problem. Unsound profit logic? Irrelevant. Negative cash flow across the board? No cause for alarm. As long as you dared to draw grand visions, narrate bold futures, and proclaim industry disruption, capital poured in blindly! Many companies first hit valuations of several billion dollars—only to be asked later, 'How do you plan to turn a profit?'—and respond uniformly: 'We’ll figure that out later!' But today, central banks worldwide are collectively turning off the liquidity spigot! Starting in September 2026, the three major central banks tightened policy simultaneously in the same month! The last time we saw a monetary tightening of this magnitude was in 2022—when the Nasdaq plunged nearly 30%, and countless tech assets were halved—or worse! So we must sound the alarm: This round may prove even harsher, deadlier, and more intractable than the 2022 episode! How does this round differ from 2022? Let me highlight several key distinctions: First, this round of rate hikes is *passive*, driven by war-induced oil price spikes! In the past, rate hikes responded to overheated economies and soaring inflation—deliberate measures to cool things down. This round is entirely different! Europe’s overall August inflation stood at just 3.3%—not alarming—but its *energy inflation* surged to 14.3%! The root cause? Escalating Middle Eastern warfare! The Houthis have repeatedly bombed Saudi oil refineries; southern facilities sustained damage, over seventy people were injured, and shipping through the Strait of Hormuz has ground to a virtual halt. Before the war, one-fifth of the world’s oil passed through this strait; now, only seven merchant vessels transit daily—essentially a complete chokepoint! Oil prices are now pressing toward the $100-per-barrel mark. Goldman Sachs’ latest forecast: Disruption to Red Sea and Strait of Hormuz shipping will persist at least until 2027! This means energy-driven inflation is a long-term, structural pain point—not transient volatility! Central banks have no exit route: rate hikes cannot stop. This isn’t temporary pain—it’s long-term monetary tightening! Second, the Fed is caught in an extreme tug-of-war—and market panic has already priced it in! At last month’s Jackson Hole Global Central Banking Symposium, Fed Chair Walsh openly adopted a hawkish tone: 'Inflation is falling too slowly; the Fed still has substantial work ahead.' In plain language: Rate-hike expectations have doubled—and monetary policy will tighten further! Yet on the other side, the looming election places immense political pressure on the Fed. Trump, Vance, and other senior officials have publicly demanded the Fed cut rates and ease policy to rescue markets! One side is uncontrolled inflation; the other, existential electoral stakes. The Fed is torn—unable to advance or retreat. Crucially: Regardless of whether the Fed hikes next week, markets have *already fully priced in* further hikes! The 10-year U.S. Treasury yield remains stubbornly anchored at 4.7%—this reflects the true cost of capital, voted on by real money, and is far more authentic—and far more consequential—than any central bank speech! This dynamic effectively places a tightening headlock on both U.S. equities and gold. What is the essence of the AI sector? It is a capital-intensive, massively cash-burning model—fundamentally unsustainable under high interest rates! Today’s AI boom differs fundamentally from the internet boom of 2000. The prior internet wave was light-asset; this AI wave is a hundred-billion-dollar, heavy-asset gamble!