8.22 Jackson Hole Conference, why did Powell's speech trigger market volatility?
1⃣ Interest rate cut expectations have been infinitely amplified by the market, and the current hope for a rate cut has just fallen back to the 70–80% range;
2⃣ Inflation remains high, and employment is relatively weak, with complex opinions within the Federal Reserve—there are strong risks of not being able to cut rates or poor transmission;
3⃣ Political interventions are frequent, and the Federal Reserve's "independence" is under severe test—once the speech content leans dovish or hawkish, it may be infinitely interpreted by the market.
Simply put, a single word from Powell could make the market jump three feet high, or it could immediately turn around and keep falling.
