Yesterday's GDP data was a false alarm
The U.S. economy seems to have weathered the storm, but once the PCE data was released, the issues became more apparent: wages are stagnant, yet consumption is still holding up, which is an unhealthy situation.
Once the unemployment rate rises, the market either cheers for interest rate cuts or panics and sells off.
The recently announced unemployment rate jumped from 4% to 4.2% in April, and even Powell and the Federal Reserve have admitted that the economy is on a downward slope. This is why everyone has been worried about the first quarter GDP data, fearing that the economy is not doing well.
As we enter the second quarter, whether the economy can hold up—especially domestic consumption—becomes crucial. During such times, the monthly unemployment rate becomes a key signal. If the unemployment rate continues to rise, the Federal Reserve may accelerate interest rate cuts, but this also means the economic situation will worsen.
If the unemployment rate truly rises tomorrow, the market will definitely explode.
Optimists may feel "there's hope for rate cuts," betting heavily on the Federal Reserve speeding up rate cuts.
Cautious investors will panic and sell off. Regardless of the reaction, the non-farm payroll data will become the "stabilizing force" for the market's direction moving forward.
Stay tuned to Hashini, we will interpret the situation for you at the earliest tomorrow night～
