At 10:00 PM Beijing time tonight, Powell is about to deliver a speech, which will be his last as the Chairman of the Federal Reserve at Jackson Hole - the market seems to have received the news in advance, the dollar is strengthening, gold is declining, and the S&P 500 has fallen for five consecutive days, marking the longest losing streak of the year.
"New Federal Reserve News Agency" suddenly published a spoiler, revealing that Powell is preparing to scrap the framework established in 2020. It sounds a bit abrupt, but it's a significant matter.
Five years ago, the Federal Reserve implemented a "major innovation": allowing the inflation rate to be slightly above the 2% target for a period to compensate for times when the inflation rate was below target. In terms of employment, the concern was only about "too high unemployment rates," and not about "employment being too good." The idea at that time was to let the economy and employment run a bit longer. This logic sounded reasonable in the context of the pandemic outbreak, with concerns about a prolonged economic downturn. However, reality later struck the Federal Reserve hard: inflation soared in 2021, far exceeding their expectations. Now, the Federal Reserve is preparing to announce a return to a more traditional framework - focusing on inflation and no longer unconditionally "pampering" employment.
From a medium-term perspective, this means that the Federal Reserve will adopt a more "hawkish" stance, being more sensitive to inflation and relatively tolerant of employment - the future space and pace for interest rate cuts will be slower than the market expects. Even if there are rate cuts in the future, they will be "passive" and "very cautious," rather than the continuous easing seen in 2019 - which is the last thing Trump wants to see.
Currently, there is no consensus expectation for this meeting, which is the most dangerous aspect, indicating that whatever Powell says could trigger an excessive market reaction.
Today we released (Global Market Strategy: Storm Warning (Turning Point)), this is not an ordinary report, every analysis is intelligence. Every conclusion is a weapon.
Report Highlights:
1. The opening is a major prediction about China, the next act is about to unfold:
- Exclusive interpretation: What will happen to the Chinese stock market next? Money is flowing, but why is it not trending? Can Hong Kong stocks still be bought? Your concerns are all answered here.
- Goldman Sachs analyzed 20,000 articles from Chinese official media and came to a conclusion, being optimistic about 20 Chinese stocks, we interpret this.
2. The U.S. tech stocks are experiencing huge tremors, is it a precursor to a collapse or a final "buying opportunity"? Will the dollar face a historic collapse? After reading this report, you will no longer view the market the same way.
3. The RMB is performing strongly, but suddenly many people are bearish, is depreciation about to begin? This report reveals more insider information.
4. Gold has been quiet for too long, it's time for some big moves. We provide clear point predictions for the next year: where are the buying opportunities? Where are the dangerous traps?
5. This week, Wall Street has named 8 Chinese stocks as favorable, with 2 receiving overweight ratings.