——Fed Chairman Powell sent the strongest signal so far on rate cuts, intending to take action to support the labor market. Powell's speech, which attracted worldwide attention, ended with a very "light" tone throughout, trying to create a relaxed atmosphere in the market.
1. There was no mention of a 50 basis point rate cut, only a September rate cut was announced. But this was a very straightforward announcement, with the first sentence being: The time for policy adjustment has come, we do not seek nor welcome a further cooling of the labor market, and my confidence in inflation returning to 2% has increased. There was no preheating, no prefix, and this straightforwardness infected the market.
2. For Powell, outperforming the market is a very high threshold, but he did not create a "hawkish surprise" for the market. In particular, the sentence "will do everything possible to support a strong job market" gave the market a "dovish fantasy."
3. Avoid short-term guidance and discuss broader issues - the timing and pace of rate cuts will depend on data, outlook and risks. Explain the views on the labor market and inflation - inflation risks are falling and labor market risks are rising. 4. Powell actually achieved three goals:
First goal: Form expectations for the September meeting. Second goal: Explain the Fed's policy framework. The pace of monetary tightening in the coming months will depend on the balance of risks in the US economy. Third goal: Sharp volatility in the safe-haven market. Powell's speech tonight may affect the next president (not good for Trump).
In terms of content alone, it is actually all information that the market knows. If there is anything that exceeds market expectations, it is just that the focus has been moved to the first sentence. There is no "hawkish surprise", but there is a "dovish fantasy".
After Powell's speech, the gains in gold and US stocks began to fade, and the market seemed to understand something. We are at a turning point, but it is difficult to grasp the turning point. $BTC $ETH
Report highlights:
1. Decoding the next major Fed move, one thing is almost certain, but most people have not yet realized it. This event will determine the direction of global markets in the coming months. In addition, we have updated our forecast for rate cuts throughout the year.
2. While people are paying attention to the Federal Reserve, the progress of the US election cannot be ignored. At present, the Federal Reserve has 60% influence on the market, while the election accounts for 40%. The situation has changed, and many unexpected things may happen next.
3. Release the latest forecast for the RMB: The trend of the RMB has undergone a major reversal, and many people may find it difficult to foresee scenarios in the future.
4. This week, Wall Street specifically named 19 Chinese stocks that they are optimistic about, and they believe that two of them have a potential increase of nearly 70%.
