Here is the big picture on the macro backdrop right now. Inflation pressure is still rooted in too much money chasing too few goods, with the United States at the centre of the latest liquidity push. Since late 2024 policy rates have trended down and markets expect more cuts through 2026. The lower cost of money is most likely to help Washington rather than Main Street, as the Treasury leans on short term issuance to fund large programmes and the trade confrontation. Cheaper energy from potential Venezuela supply could even give the central bank cover to cut further.

Liquidity is already flowing. The central bank has injected roughly 74.6 billion via T bills to support bank reserves and to nudge Treasury funding costs lower without signalling a loss of confidence in long dated debt. Surveys suggest markets are braced for about 220 billion of purchases over the next year, with scope to scale closer to 500 billion if needed. Banks remain cautious and benchmark rates are not fully aligned with the policy rate, so more action is possible. History says the central bank tends to overshoot, which raises the risk of another wave of excess liquidity.

That backdrop supercharged assets in 2025 and could set the stage for another broad rally in 2026. The split in the economy is stark. Those with easy access to capital such as large tech platforms and asset owners stand to gain, while households and smaller firms face another squeeze. Inequality would likely widen as financial conditions ease for markets faster than for the real economy.

Fiscal dynamics are moving the same way. The deficit is tracking around 1.9 trillion with debt near 100 per cent of GDP and projected to rise toward 118 per cent by the mid 2030s. More than a third of spending is not covered by revenue, roughly 1.62 spent for every 1 collected. Policy talk ranges from rebuilding energy capacity abroad to domestic industrial ambitions, all of which require substantial funding and add to the call on capital.

The most immediate inflation impulse may come from commodities. The United States is scrambling to secure real resources with paper money, and copper has surged above 13 thousand dollars a tonne from about 8 thousand 500. Demand is being driven by data centres, grid upgrades, construction and defence. Lower mortgage rates might help buyers, but higher input costs raise build prices and feed through to consumers. China is unlikely to stand aside and is set to keep output high, import more ore or acquire foreign supply, turning copper and other materials into a two way arms race.

Bottom line. Expect easier financial conditions, firm asset prices and persistent cost pressure in materials and goods. Energy may soften, but the broader inflation pulse could stay stubborn. The risks are policy overshoot, deeper inequality and a longer grind in the cost of living.