#CreatorPad
I will explain simply why today's data on unemployment claims and producer price index has an impact on the Federal Reserve's decisions:
When inflation indicators (such as PPI or CPI) rise significantly, the central bank tends to take actions to cool down the economy, most notably raising interest rates or keeping them at high levels to prevent inflation from worsening.
These decisions contradict what Trump has been demanding for months, which is to lower interest rates, so the negative market reaction stems from the fear of continued inflation; the potential for raising interest rates or keeping them steady can reduce investor confidence, thereby reinforcing the negative reaction.
This is starting to confirm for me that a correction phase is approaching in September and may have indeed begun after today's news unless Trump does something like reduce tariffs or dismiss Jerome Powell.
For two weeks now, I have been repeating that the U.S. market has broken the RSI trend and is nearing a strong correction, and currently, neither holding interest rates steady nor lowering them will benefit market movement, because it has valued itself with increases that preceded the same decisions, and yet what investors hoped for did not happen, so the time for correction has come.
