$BTG $ENA $UB Jacko Jackson Hole speech by Waller: Don’t wait for the Fed—watch market signals!
Today, global markets are focused on one person—the Fed’s new chair, Waller. After a 25-minute speech, the feeling is simple: don’t expect the Fed to point you in the right direction. Watch the data yourself.
The key is three things:
1. Stubbornly target 2% inflation—rate hike options aren’t gone.
Waller threw out the numbers: 12-month PCE year-over-year at 3.7%, 6-month annualized at 4.1%, and an inflation diffusion index of 54%, far above the pre-pandemic 32%. He said that improving inflation in summer doesn’t mean the trend has reversed. “If inflation doesn’t keep falling, we still have work to do.” Translated into plain language: the chances of a rate hike are still there—don’t get too optimistic.
2. Financial conditions aren’t actually tight—high rates still have to be endured.
Markets think policy is tight enough? Waller doesn’t buy it. Business credit is relatively loose, corporate bond spreads are at historical lows, corporate earnings growth is over 20%, and capex growth is 9%. With this kind of economic resilience, why cut rates? This line basically shattered expectations of rate cuts—gold prices even seemed to get twisted into a pretzel.
3. Forward guidance is outdated—the Fed won’t provide a “roadmap” anymore.
Waller said forward guidance was a crisis-era emergency tool. Now it would only create a “hall of mirrors” effect: markets trade the Fed’s mood, while the Fed looks at market prices to judge—ending with both sides getting blinded. So he clearly rejected a mechanical reaction function. Going forward, ask less about “will they hike next time?” and watch the data instead.
What about AI? Waller defined it as a “potential new factor of production.” He said technological progress could even outpace Moore’s Law, and he even set up a working group to study it. But the takeaway is crystal clear: it won’t affect current policy.
All in all, Waller’s stance is hawkish at heart, with flexible delivery. Until inflation reaches 2%, don’t expect them to loosen. Jobs are steady, but they’re nowhere near a situation that requires a rescue. What the market should do isn’t guess what the Fed will do—it’s adapt to a new era with “no forward guidance.”
The AI stock sector in the US is choppy, and even gold’s 1-minute chart looks like a pretzel—those are the market’s first reactions. Traders’ days may get even harder from here. #沃什称通胀是美联储首要关注
Today, global markets are focused on one person—the Fed’s new chair, Waller. After a 25-minute speech, the feeling is simple: don’t expect the Fed to point you in the right direction. Watch the data yourself.
The key is three things:
1. Stubbornly target 2% inflation—rate hike options aren’t gone.
Waller threw out the numbers: 12-month PCE year-over-year at 3.7%, 6-month annualized at 4.1%, and an inflation diffusion index of 54%, far above the pre-pandemic 32%. He said that improving inflation in summer doesn’t mean the trend has reversed. “If inflation doesn’t keep falling, we still have work to do.” Translated into plain language: the chances of a rate hike are still there—don’t get too optimistic.
2. Financial conditions aren’t actually tight—high rates still have to be endured.
Markets think policy is tight enough? Waller doesn’t buy it. Business credit is relatively loose, corporate bond spreads are at historical lows, corporate earnings growth is over 20%, and capex growth is 9%. With this kind of economic resilience, why cut rates? This line basically shattered expectations of rate cuts—gold prices even seemed to get twisted into a pretzel.
3. Forward guidance is outdated—the Fed won’t provide a “roadmap” anymore.
Waller said forward guidance was a crisis-era emergency tool. Now it would only create a “hall of mirrors” effect: markets trade the Fed’s mood, while the Fed looks at market prices to judge—ending with both sides getting blinded. So he clearly rejected a mechanical reaction function. Going forward, ask less about “will they hike next time?” and watch the data instead.
What about AI? Waller defined it as a “potential new factor of production.” He said technological progress could even outpace Moore’s Law, and he even set up a working group to study it. But the takeaway is crystal clear: it won’t affect current policy.
All in all, Waller’s stance is hawkish at heart, with flexible delivery. Until inflation reaches 2%, don’t expect them to loosen. Jobs are steady, but they’re nowhere near a situation that requires a rescue. What the market should do isn’t guess what the Fed will do—it’s adapt to a new era with “no forward guidance.”
The AI stock sector in the US is choppy, and even gold’s 1-minute chart looks like a pretzel—those are the market’s first reactions. Traders’ days may get even harder from here. #沃什称通胀是美联储首要关注
