Do you understand the hidden meaning in Powell's words? Don't be foolish!

Yesterday I saw many analysts interpreting Powell's speech as "neutral to hawkish," and I couldn't help but laugh. How eager are those people in the market to be bullish? Just hearing one line, "The balance of risks is changing... may need to adjust the policy stance," and they start celebrating, with U.S. stocks and precious metals skyrocketing? They really are a bunch of suckers who only read the headlines and not the content!

As someone who has been watching the market for many years, I have to say that this reaction is simply a collective hallucination. I have listened to Powell's speech several times; it clearly contains hidden dangers, yet the market interprets it as a dovish signal. Isn't that ridiculous?

The article by Bloomberg titled "The Market Misread the Subtlety of Powell's Remarks, What a Shame" hits the nail on the head. The article begins with a classic quote from Greenspan: "If you think I’m being too clear, you’ve definitely misunderstood me." Isn't this exactly the current situation?

Let's see how the market oversimplifies: Powell only said "the economic outlook may require a policy adjustment", and everyone is getting excited thinking that "a rate cut is certain in September"! My goodness, he emphasized the "hazy economic outlook" and "risks coexist" throughout his speech, and he didn't mention any definite course of action at all!

Not to mention that he clearly stated, "We will not set a default path," isn't that just telling you not to be too optimistic? The Federal Reserve is now completely data-driven and doesn’t care about any fantasies you investors might have!

The funniest thing is that these people have forgotten that the Federal Reserve has fundamentally turned hawkish. Even if there is a rate cut, it would be because the economy is so bad that it has to be cut, rather than some "wonderful end to tightening"! In this context, a rate cut is completely different from the market's expectation of a stimulus cycle!

In fact, Anna Wong, the chief U.S. economist at Bloomberg, shares my thoughts—"Powell is not dovish at all today; this is just a speech that will take time to reveal its hawkish nature." She puts it very well—this is a "tightrope walk" under political pressure, superficially offering hope for rate cuts while actually laying the groundwork for a hawkish stance.

So, after the US stock market surged at 10 o'clock, it has been consolidating sideways, and the market has finally begun to calm down, starting to realize that it has been fooled.

The most important thing now is the non-farm payroll and CPI data in September, which are the key factors that truly determine the actions of the Federal Reserve. If the job market continues to be weak and inflation does not rise again, we may see a rate cut. However, as long as the core CPI monthly rate is above 0.3%, I believe Powell will likely continue to hold steady!

He mentioned inflation 63 times throughout the whole speech. Isn't that obvious enough? Stop deceiving yourself! I insist on an independent viewpoint not to be different for the sake of it, but to respect the existence of risk. There are too many blind-following suckers in this market!