To The Moon

Federal Reserve Chairman Powell was interviewed by the host at the Economic Club of Washington last night and gave a speech. The content of the answer is that the mixed emotions of hawks and doves caused US stocks to fluctuate up and down for a while, and finally all closed up due to the strength of semiconductor technology stocks.

The more dovish content is that Powell used the word disinflation again. He emphasized that the process of downward inflation in the United States has begun, especially the inflation on the commodity side, which accounts for about a quarter of the US GDP. But he thinks there is still a long way to go, because we are in the very early stages of falling inflation.

Powell predicts that this year will be a year in which inflation will drop sharply, but not only this year, it must also go down to the 2% target next year. And this process cannot be smooth sailing, and there may be ups and downs in the middle, so Powell believes that it is necessary to continue to raise interest rates and maintain high interest rates for a period of time.

Regarding non-agricultural employment, which was significantly higher than expected, Powell said that he did not expect it to be stronger than he imagined! (Even the chairman of the Federal Reserve can’t think of it. Can anyone guess it) 😂 He thinks the non-agricultural data shows that the Fed will feel that it will take a long time to fight against inflation, because the labor market is really too strong!

He said that we will react to the numbers and if we continue to see strong jobs reports, the Fed will take more action and raise interest rates more than the market is currently expecting! This is more hawkish content, that is, the Fed may indeed change its original path of interest rate hikes and peak expectations because of the hot job market.

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