The big news is here, will the market's big pie rise by 150,000 or drop by 50,000 tonight?
Will tonight's market be like ordering a Buddha Jumps Over the Wall, only to receive instant noodles with a braised egg?
To see who the real center of attention is tonight, we have to wait for the Federal Reserve's interest rate meeting. After all, the global capital is currently focused on the remote control in Powell's hands: will he press the 'rate cut life extension button' or pull out the 'rate hike warning sign'?
The question for the global market is whether the Federal Reserve will cut rates tonight? This is more exciting than a mother-in-law checking your household registration.
Let’s get to the conclusion first: a rate cut is highly likely, but the magnitude may be less than market expectations. The reasons can be summed up in three words: inflation, debt, and election.
This stubborn mule of inflation has not been completely tamed; regardless of whether it's true or not, the Federal Reserve has been using this as an excuse, leading the global market by the nose. The U.S. January CPI rebounded to 2.8%, and while Powell claims 'inflation is controllable', his body is quite honest—the latest dot plot suggests that there may only be two rate cuts by 2025, which is more stingy than the market's expectation of three, with the real intention being to firmly control financial hegemony.
Of course, the $34 trillion government debt pressing down is also an important reason; just the interest alone burns $1.5 billion every day. If rates aren't cut, the Finance Minister won't even be able to cover his coffin lid. If it doesn't help solve the debt problem, it doesn't matter what choice is made.
Furthermore, although the election has ended, the political game continues. The Trump team is crazily pressuring the Federal Reserve 'not to delay my vote-pulling', withdrawing the Secret Service protection for Biden's children is part of this ongoing game. However, Powell doesn’t want to bear the blame for 'manipulating the election', so he won't just go along with the Trump team. Regardless of whether rates are cut or by how much, it will definitely shock the market.
No matter how the market trends, whether bullish or bearish, what we need is to go with the flow. Even if we miss out on the market tonight, our principal is still intact. Comment 168 and follow my lead.
