Market bets on Powell's speech at ten being hawkish, with a September rate cut unlikely to exceed 25 basis points

According to Jin Ten data, the currency options market is releasing strong signals — bullish sentiment towards the dollar has risen to its highest level in three weeks, with a clear core logic behind it: traders are generally betting that Federal Reserve Chairman Powell will not take an overly dovish stance on interest rate policy in his upcoming speech.

Regarding the market's primary concern about the September rate cut magnitude, Sonja Marten, head of foreign exchange and monetary policy research at Deutsche Bank, offers a clear prediction: the possibility of a 25 basis point cut in September may be retained, but Powell will definitely not take more aggressive easing actions. She further points out that Powell will also face political pressure this time, and is likely to resist calls for a rate cut from Trump, clearly conveying the stance that "Federal Reserve policy will not deviate from economic fundamentals and will not be influenced by White House pressure."

Nick Rees, head of macro research at Monex Europe, focuses on short-term fluctuations in the dollar: if the market overly seizes upon Powell's speech's sporadic expressions suggesting that "a September rate cut may be possible," it could trigger a brief sell-off of the dollar, but such a correction is unlikely to last. Overall, institutions generally believe that Powell's speech will lean toward a hawkish tone, and this expectation is likely to drive the dollar to continue strengthening before the end of this week.