The core message of Federal Reserve official Musalem's speech today is: don't just focus on whether there will be a rate cut at a specific meeting; look at the overall trend of interest rate changes. Currently, inflation remains relatively high and there are sticky risks, but if the employment market encounters issues, policy may shift immediately. He stated that data before the September meeting is crucial, especially the next employment report—if it shows a clear deterioration in the employment market, rate cuts could be initiated quickly; if the data is decent, we will continue to observe.
In my view, Musalem's remarks suggest that the Federal Reserve is 'walking a tightrope': on one side is stubborn inflation, and on the other is potential employment risk. This is actually quite similar to the situation in 2023—when the market quickly adjusted its policy stance due to sudden changes in employment data. For example, after a certain non-farm payroll data last year fell short of expectations, Bitcoin surged 8% on that day, with traditional funds rapidly flowing back into risk assets.
Currently, 'tariff inflation' is considered by Musalem to be temporary (for instance, tariffs during the Trump era briefly pushed up prices, but the market gradually absorbed it), with the real variable being employment. If the non-farm payroll data on September 6 shows a jump in the unemployment rate (for example, exceeding 4.2%), expectations for interest rate cuts will immediately rise, and risk assets (including cryptocurrencies) are likely to see a rebound.
If the next employment report surprises to the downside, where will the Federal Reserve's rate cut bullets be aimed first? Follow me for real-time interpretations of the market's first reactions on non-farm payroll night.#ETH创历史新高
