In yesterday's Federal Reserve drama, Powell completely stopped pretending! What overall assessment of economic data? Nonsense! Now there’s only one number left in his eyes: the unemployment rate! How harsh is that statement? It's like pointing at the whole market and shouting: if tonight’s non-farm payrolls are still so damn strong, thinking of a rate cut in September? Not a chance! Want to sip a few more spoonfuls of easing soup in the remaining days of this year? Dream on! This is no longer a hint; it’s using the unemployment rate as a death-free card, directly welding shut the door to rate cuts!
At the press conference, he pretended to say some 'soft words' as a cover: Oh dear, consumers are slow to spend, can that little GDP growth in the first half fill the gaps? The labor market looks weak... Bah! All that turned into nonsense smoke in his mouth, gone once dispersed! The real sharp point is just one sentence, 'Now! Right now! Keep a close eye on the unemployment rate!' Listen to this tone, a 4.1% unemployment rate for him is not just a number, it's a steel shield! It's the ultimate weapon to block all excuses for interest rate cuts!
The funny thing is, the fire in his own backyard started first! Waller and Bowman, those two big shots, actually dared to publicly sing opposite tunes, banging the table demanding easing! It’s something not seen in over thirty years! This slap in the face is loud. But Powell, that old man, stubbornly insists on holding high the tattered flag of the unemployment rate despite the internal rebellion. Why is he so arrogant?
Why should it be? Just based on that bit of lucky thinking and a tightened faucet! Immigration policies are tightly controlled, foreign labor can't come in, and on the surface, the job market seems to hold up. Resignation rates, job vacancies? For now, there’s no collapse. But those in the know are clear, this 'balance' is as fragile as paper! The guy from the Royal Bank of Canada, Reid, said it clearly: labor 'supply and demand are both slipping down', this balance has long been a strong bow at its end! And Powell? He treats this thin layer of window paper as bulletproof steel! Self-deception is played so well!
These old foxes in the market are not easily fooled! As soon as Powell finished speaking, Wall Street immediately turned against him: U.S. stocks plummeted, bond yields surged, and the dollar soared as if it had taken medicine, while the money market directly rubbed the rate cut expectations into the ground! This reaction is quick, precise, and ruthless! Clearly telling Powell: we see through your little thoughts, buddy!
Look at how badly expectations have dropped! Betting on a rate cut in September? Now it’s like flipping a coin for heads or tails, the most 'hawkish' situation in over a year! As for how many cuts this year? The market basically lies flat and accepts it, daring to bet just once, and it better be a symbolic one! Standard Chartered's England said it bluntly: 'Powell is just one step away from tattooing “policy and unemployment rate are one and the same” on his forehead! Does the market think this way, is there something wrong?'
That 'full employment' he talks about sounds glamorous, but look closely and it's all traps! The unemployment rate has been stuck in the 'low' range of 4.0%-4.2% for over a year, and Powell dares to shamelessly shout 'full employment'? Are you kidding? Peel back this shiny exterior and look inside: hours are shrinking quietly, more and more people are working part-time, and wages are crawling like a snail... It's not that people can't find work, it's that they can't find decent, family-sustaining jobs! Powell, are you blind or selectively blind?
Inflation? That’s another sharp knife in his hand! He casually says 'slightly above the 2% target', with core CPI at 2.9% and core PCE at 2.8%. Does that 'slightly above' not hurt? Behind it is the suffering of ordinary people being gradually squeezed by prices! More terrifying is Trump's tariff sword! Powell says this thing only affects 'a little bit', but he himself isn’t confident, adding 'who the hell can guarantee'? What if this tariff really turns into a runaway horse, pushing commodity prices up all the way? The Federal Reserve can only stare blankly and continue to maintain high interest rates, what else can they do? Cut rates? You can wait for that! It would be good if you can smell it next year!
Look back at the market's face, it’s swollen to a pig's head! Back in April, they were still dreaming of a 130 basis point cut this year. A month ago, half the dream was gone, shrunk to 70 basis points. And now? Only about 35 basis points left, a knee-jerk reaction! What’s even more chilling is that the futures curve shows that until Powell rolls up his mat and leaves in May next year, the market only dares to bet on a total cut of 65 basis points.
A chilling question has emerged: Will Powell, in his last less than a year in office, not cut rates even once? Although it doesn't look certain now, who dares to swear 'impossible'? When the unemployment rate becomes his 'sacred altar', when inflation haunts under the shadow of tariffs, when even those within the Federal Reserve start flipping tables...
Powell, this old man who was once regarded as a 'savior' by the market, is he digging a pit for himself, preparing to set up a 'zero rate cuts during his term' shame pillar?
Will tonight’s non-farm payroll be the last straw that breaks the camel’s back for rate cuts? Powell, do you dare to keep the 'stubborn resistance' act going until the very last second before you roll up your mat and leave?
Tonight’s non-farm payrolls, are you betting on a rise or a fall?