Tonight at 9 PM, Federal Reserve Chairman Powell will speak publicly. In the last few days before the December interest rate meeting, this statement may directly affect market nerves.
Why is this speech particularly critical?
Market expectations for a rate cut in December have already exceeded 80%, nearly forming a consensus. Therefore, rather than whether there will be a rate cut, what everyone is more concerned about is Powell's hints on "what comes next"—is it the beginning of an easing phase or a cautious approach of taking one step at a time?
Looking back at a few previous instances, his speeches have influenced the market in the following ways:
· An October statement that was somewhat "hawkish" triggered significant market fluctuations;
· While recent dovish signals have led to a short-term strengthening of risk assets.
Tonight, history is likely to repeat itself.
Two possible scenarios:
1. Release dovish signals: If he emphasizes economic risks and controllable inflation, it may further strengthen rate cut expectations, potentially "adding fuel to the fire" for market sentiment.
2. Release hawkish signals: If he reiterates inflation resilience and data dependence, it may "douse cold water" on market expectations, leading to increased volatility.
A few observations and suggestions:
· Listen to the tone, watch the wording: Besides "whether to cut or not," pay closer attention to his description of the "future path."
· Volatility is inevitable, be prepared: Markets can easily amplify emotions before and after major events, it is advisable to manage positions and remain flexible.
· This is just one link: After the speech, there will be several employment and inflation data releases this week, which together form the puzzle of Federal Reserve decision-making.
Tonight's speech can be seen as a "preview" for the December meeting. Stay attentive, but there's no need for excessive interpretation—ultimately, the true direction of the market must return to the economy itself.
(The above analysis is based on public information and market logic and is for reference only)
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