Let’s talk about next week’s “big bomb.” Kevin Warsh’s remarks this time, put bluntly, show that he thinks the market is having too much fun. He believes a 4.1% unemployment rate is still fairly stable, and then turned around and said inflation hasn’t been brought under control yet. The 30-year U.S. Treasury yield recently surged to a 20-year high, which is already enough to make people nervous, and he still wants to add fuel to the fire.

September 4 is both nonfarm payrolls day and the day Broadcom reports earnings. Everyone is now hoping that new jobs will hold around 58k and that the unemployment rate won’t exceed 4.1%. If the data is too strong, Warsh will surely think there is still room to raise rates; if the data is too weak, people will instead wonder: Is the end near—are ordinary Americans running out of money to spend, signaling a recession?
This mindset is actually pretty twisted. The S&P 500 is just a little short of its record high, and both bulls and bears are waiting for an excuse to make a move. On the tech side, Dell and Palo Alto Networks are also due to report results. A projected 34.5% increase in profits this year is indeed a strong support, but if rate-hike expectations become a reality, higher borrowing costs will inevitably drag valuation multiples lower.
Anyway, Warsh now wants to build a “quieter” central bank, which basically means that from now on, don’t expect me to give you advance notice—the data will decide. Next Wednesday night, nonfarm payrolls and Broadcom’s earnings report will land at the same time, making it the ultimate showdown between the macro and micro levels. I’ll just sit back and see whether AI profits are tougher, or the Fed’s words are.