At 22:00 Beijing time tonight, Powell is about to deliver a speech. This will be his last speech 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 falling, and the S&P 500 has declined for five consecutive days, marking its longest losing streak of the year.
"The New Federal Reserve News Agency" suddenly released an article revealing that Powell is ready to scrap the framework established in 2020. It sounds a bit abrupt, but this is a significant matter.
Five years ago, the Federal Reserve made 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 the target. In terms of employment, they only worried about "too high of an unemployment rate" and not about "employment being too good." The idea at the time was to let the economy and employment run a bit longer. This logic sounded reasonable against the backdrop of the pandemic's initial outbreak and fears of a prolonged economic downturn. However, later reality gave the Federal Reserve a wake-up call: 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 be more "hawkish," meaning it will be more sensitive to inflation and relatively tolerant of employment - future interest rate cuts will be slower and more cautious than the market expects. Even if there are rate cuts in the future, they will be "passive" and "very cautious" rate cuts, rather than the continuous easing seen in 2019 - which is the scenario Trump least 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 Chapter)), 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 "swiftly," but why hasn't it made the "hot search"? Can Hong Kong stocks still be bought? Your concerns are all addressed here.
- Goldman Sachs analyzed 20,000 articles from Chinese official media and reached a conclusion, being optimistic about 20 Chinese stocks, which we interpret here.
2. U.S. tech stocks are experiencing a massive shake-up; is it a precursor to a crash or a final "buying opportunity"? Will the dollar face a historic collapse? After reading this report, you will no longer view the market in the same way.
3. The yuan 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 price predictions for the coming year: where are the buying opportunities? Where are the dangerous traps?
5. This week, Wall Street has pointed out 8 Chinese stocks to be optimistic about, with 2 receiving overweight ratings. The Federal Reserve, leaking information first.
