On the eve of the non-farm payroll report, the whole market is betting: Will Powell be "driven crazy" by oil prices?

Currently, the global financial markets look very much like a large-scale battlefield.
The Middle East is at war,
Oil prices are flying wildly,
BTC is plunging,
And tonight, the U.S. non-farm payroll data is coming again.
Many people may not realize:
The ones who are truly suffering the most are actually the Federal Reserve Chair.
Because now, Powell faces the most headache-inducing situation:
The economy is beginning to slow down,
But oil prices might push inflation back up.
This is called "stagflation risk."
And it’s the thing the financial markets fear the most.
If the situation in the Middle East continues to worsen, and oil prices keep rising, U.S. inflation is very likely to re-emerge.
So what will the Fed do?
Cutting interest rates would worry about inflation rebounding,
Not cutting rates, and they fear the economy will stall.
So tonight’s non-farm data is extremely significant.
It will determine whether the market is more worried about:
“Recession,” or “out-of-control inflation.”
If non-farm payrolls weaken significantly:
The market will think the Fed is forced to cut rates.
BTC and U.S. stocks might rebound together.
Because liquidity expectations will heat up again.
But if non-farm payrolls are strong, and oil prices are high, then the market will enter the most uncomfortable scenario:
“Prolonged high interest rates.”
This is not friendly to BTC.
Because in the past few years, Bitcoin’s biggest upward momentum was essentially driven by global easing.
The cheaper the money,
The crazier BTC becomes.
Now the question is:
Will the conflict in the Middle East continue to escalate?
I think there will be friction in the short term, but the probability of full-scale war is low.
Because Iran knows that truly blocking the Strait of Hormuz would be equivalent to a full confrontation with the global energy market.
And the U.S. also doesn’t want to get caught in a long-term Middle East war.
Both sides are more like “controlling escalation.”
But even so, market volatility will not be small.
Because what capital fears most is not bad news,
But uncertainty.
And the current uncertainty is almost at its maximum.
So tonight’s data will very likely determine the market rhythm for the next week.
If the data is weak:
BTC might quickly rebound.
If the data is strong:
The market might continue to stage a “high-level sell-off.”
In one sentence:
It’s not just the crypto world trading now,
But the global macro is trading in the crypto world.
#美伊冲突再升级