Last night, the unexpected changes in the U.S. labor market and economic inflation, along with a series of highly provocative remarks by Trump, triggered intense fluctuations in global financial markets.
Specifically, the robust performance of the U.S. job market and the acceleration of inflation in the services sector became the focal point of market attention.
In November, JOLTS job vacancies unexpectedly surged by 259,000, bringing the total to a historic high of 8.098 million.
At the same time, the ISM Non-Manufacturing Purchasing Managers Index (PMI) jumped from 52.1 in November to 54.1, and the price index soared from 58.2 to 64.4, marking a new high in 11 months, which undoubtedly intensified market concerns about persistently high inflation.
Against this backdrop, expectations for the Federal Reserve to soon cut interest rates were significantly weakened, with the market generally expecting the probability of a rate cut in January to be below 5%. This news directly led to a sharp decline in risk assets such as BTC.
Adding insult to injury, Trump made a series of shocking remarks at last night's press conference, with his rhetoric of “new imperialism” causing widespread panic in the market.
Trump not only stated that he does not rule out the possibility of using force to seize Greenland and the Panama Canal but also threatened to impose high tariffs on Denmark if it does not cede Greenland, and plans to incorporate Canada into the U.S. sphere of influence through economic means.
These remarks not only highlighted Trump's hardline stance in international affairs but also raised concerns in the market about the global political and economic landscape.
Senior political commentator Jonathan Chait pointed out that Trump's “new imperialism” rhetoric has a strong performative nature, aimed at pressuring allies through bravado and catering to the sentiments of some voters.
However, such extreme remarks and actions undoubtedly exacerbated market panic, leading to severe fluctuations in global financial markets.
In summary, the unexpected changes in the U.S. labor market and economic inflation last night, along with President Trump's extreme remarks, jointly constituted the fuse for the market's sharp decline.
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