Why is tonight so critical? Because in history, there are very few such intensive and important macro data released on the same night.

The only inflation-related data known so far is the non-farm data released last Friday that exceeded expectations, showing the booming job market.

Therefore, based on this non-farm data, which can be fake or real, there are several potential paths:

1. CPI fell, lower than expected, and employment was booming, indicating that inflation was under control while economic growth was strong, which is a huge positive. BTC rose back to around 69,000-70,000 and prepared for a new high again. (30% probability)

2. CPI met expectations, and the market briefly spiked up and down and followed the US stock market until Powell spoke. It may fall if it is dovish, hawkish or completely neutral, because the current small-level trend is biased towards the short side; (60% probability)

3. CPI rose, exceeding expectations, corresponding to the non-farm data, indicating that inflation has begun to get out of control again, which is a huge negative. BTC may fall directly to around 63,000-61,000 and trigger panic, leading to a large net outflow of ETFs. (10% probability)

4. Based on the above three factors, the dot plot is released:

4-1. The dot plot shows that there is a high probability of at least 2 interest rate cuts this year, which is a huge positive, indicating that the first interest rate cut will be in September;

4-2. The dot plot shows that there is still a possibility of 1-2 interest rate cuts this year, indicating that the interest rate cut in September is still uncertain, but due to insufficient liquidity in June, July and August, it is likely to go through a long-term oscillation correction.

4-3. The dot plot shows that there will be no more than one interest rate cut this year, indicating that the earliest interest rate cut will be in December, so the market will have to wait at least half a year, which is a huge negative.

In fact, CPI and Powell’s speech are not as important as the dot plot, because CPI mainly affects the resolution of the next FOMC meeting, and Powell is already a master of Tai Chi, with very good expectation management, and is unlikely to trigger extreme market conditions.

The dot plot represents the overall attitude of the Federal Reserve’s interest rate committee, and is more likely to become the fuse that triggers the next round of trend market conditions.

In short, tonight is very important. My personal guess is that CPI will be in line with expectations. Powell's speech will focus on calling on everyone to be patient, but it will still be dovish, and the dot plot shows that there will be at least one interest rate cut this year.