Powell Calls for a Drop in U.S. Stocks ⚠️

Last night, Powell spoke, focusing on two main points:

1️⃣ The same old tone: Inflation has upward risks, employment has downward risks, and the Federal Reserve must find a balance between the two.

2️⃣ He rarely commented on the stock market, saying "valuations are too high," which caused U.S. stocks to turn around immediately.

PMI data has also been released, although slightly worse than expected, it remains above the line of expansion and contraction, indicating that the economy is slowing but not yet in recession.

Therefore, this drop is actually more like a normal correction + Powell pouring cold water, rather than a complete peak. The key lies in what happens next:

If employment continues to weaken, the Federal Reserve still has room for interest rate cuts;

If inflation rises, the market will have to endure a few more hits.

In a nutshell: An interest rate cut does not equal a bull market express train; volatility is the norm.