The financial market has entered a state of 'silence', with reduced volatility in markets such as the US dollar and gold—the market is waiting for a 'confirmation signal' (Powell's speech), and volatility could erupt at any moment.

This time at Jackson Hole, what investors are waiting for is not an answer, not whether there will be interest rate cuts, but rather an attitude.

First, the atmosphere is more important than the words.

What the market really cares about is not the 'word for word' details, but the overall atmosphere. Just like last year's opening line 'interest rates need to be adjusted', the market sentiment ignited instantly. Financial markets are particularly sensitive to the 'mood'—Powell's tone, demeanor, and even whether there is applause from the audience can all serve as the basis for traders' decisions. If he is 'sour-faced' throughout, then the market may be dominated by this disappointment. The atmosphere on-site cannot be felt through the text of media reports; it's best to watch the live broadcast on Friday evening.

Second, 'risk balance' is the key phrase.

If the term 'risk balance' comes up, it might be seen as a 'positive' by the market. The Federal Reserve has always talked about a 'dual mandate': to keep inflation in check and to ensure employment. If Powell starts to emphasize 'risk balance', it means that it is no longer necessary to suppress inflation, and instead, more consideration should be given to the economy and employment. This is often a prelude to interest rate cuts.

Third, the art of ambiguity.

He cannot provide a 'roadmap'. The Federal Reserve has never wanted to be 'hostage' to the market. If Powell speaks too clearly, the market will immediately bet on larger-scale easing, which would put him in a passive position. Therefore, he will certainly leave some ambiguous space. Ambiguity is his only safe exit.

This time Powell will not be as straightforward as last year, not providing answers, but leaving enough hints.

So, the answer is already out—Powell is in a very difficult position; he cannot be too dovish (fearing inflation may reignite), nor too hawkish (fearing a market crash and economic downturn). This time the market is not waiting for an 'answer', but for a performance. Every glance and pause from Powell will serve as a reason for traders to open positions.