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Waller takes down Jackson Hole! Rate-hike odds for September jump to 60%, gold collapses, and Wall Street panics
Kevin Waller, the new head of the Federal Reserve, marks his 100th day on the job with a debut at Jackson Hole.
The market had been waiting to hear a bit of “comforting talk.” Instead, he came out swinging with a hawkish knockout punch, leaving global assets stunned.
The core message is one line: Unless inflation returns to 2%, the Fed still has “work to do.”
What does that mean? The door to more rate hikes can open at any time.
The market instantly repriced. September rate-hike odds surged from 35% to 42%, once getting close to 50% intraday. Gold plunged 3%, breaking below $4,500. The U.S. dollar surged. U.S. tech stocks took a hit—Nvidia fell more than 4%, and the Philadelphia Semiconductor Index crashed 3.47%. Bitcoin also slipped from $80,000 to $78.7k. The yield on the 2-year U.S. Treasury hit a 5-week high.
Waller also tossed out a batch of data: PCE rose 3.7% over 12 months, and the 6-month annualized figure is even higher at 4.1%. The trend isn’t cooling—it's getting “hotter.” He said, “The good data this summer isn’t enough for me to believe there has been a meaningful improvement.”
Even more forceful: he directly dismissed the market consensus that “policy is already restrictive enough.” Corporate bond and leveraged loan spreads are at historical lows, credit standards are somewhat loose, and AI-driven investment lifted equipment spending by 9%. “It’s hard for me to describe financial conditions as restrictive.”
On employment, he also blocked the hawks-and-bears playbook for getting him to cut rates: the 4.1% unemployment rate “is consistent with full employment,” and initial claims are close to the lowest level in decades. Don’t count on weak jobs data to push him toward rate cuts. #美国短期国债收益率上涨
The most explosive moment: Waller announced he’s done with forward guidance. From now on, there’s no precise roadmap—only a “compass.” He laid out seven principles: 2% is the fixed target, short-term rates are the main weapon, unconventional tools are for emergencies only… and he specifically emphasized the “mirror effect”: the Fed and the market reflecting each other, each mirror making the picture even more chaotic—so it’s better to look at the data yourselves.
Big Wall Street voices summed it up: the era when you could make money just by following the chair’s remarks has ended.
In one sentence: Waller isn’t performing anymore, and the Fed isn’t “leaking” the script. Global investors, get ready for a hard-core new era where it’s “data first, talk later.”
Next Monday, A-shares and Hong Kong stocks will most likely open lower. Hong Kong tech stocks are especially sensitive. Keep your eyes on every number—because with every frame, it could turn into your profit or loss.
Waller takes down Jackson Hole! Rate-hike odds for September jump to 60%, gold collapses, and Wall Street panics
Kevin Waller, the new head of the Federal Reserve, marks his 100th day on the job with a debut at Jackson Hole.
The market had been waiting to hear a bit of “comforting talk.” Instead, he came out swinging with a hawkish knockout punch, leaving global assets stunned.
The core message is one line: Unless inflation returns to 2%, the Fed still has “work to do.”
What does that mean? The door to more rate hikes can open at any time.
The market instantly repriced. September rate-hike odds surged from 35% to 42%, once getting close to 50% intraday. Gold plunged 3%, breaking below $4,500. The U.S. dollar surged. U.S. tech stocks took a hit—Nvidia fell more than 4%, and the Philadelphia Semiconductor Index crashed 3.47%. Bitcoin also slipped from $80,000 to $78.7k. The yield on the 2-year U.S. Treasury hit a 5-week high.
Waller also tossed out a batch of data: PCE rose 3.7% over 12 months, and the 6-month annualized figure is even higher at 4.1%. The trend isn’t cooling—it's getting “hotter.” He said, “The good data this summer isn’t enough for me to believe there has been a meaningful improvement.”
Even more forceful: he directly dismissed the market consensus that “policy is already restrictive enough.” Corporate bond and leveraged loan spreads are at historical lows, credit standards are somewhat loose, and AI-driven investment lifted equipment spending by 9%. “It’s hard for me to describe financial conditions as restrictive.”
On employment, he also blocked the hawks-and-bears playbook for getting him to cut rates: the 4.1% unemployment rate “is consistent with full employment,” and initial claims are close to the lowest level in decades. Don’t count on weak jobs data to push him toward rate cuts. #美国短期国债收益率上涨
The most explosive moment: Waller announced he’s done with forward guidance. From now on, there’s no precise roadmap—only a “compass.” He laid out seven principles: 2% is the fixed target, short-term rates are the main weapon, unconventional tools are for emergencies only… and he specifically emphasized the “mirror effect”: the Fed and the market reflecting each other, each mirror making the picture even more chaotic—so it’s better to look at the data yourselves.
Big Wall Street voices summed it up: the era when you could make money just by following the chair’s remarks has ended.
In one sentence: Waller isn’t performing anymore, and the Fed isn’t “leaking” the script. Global investors, get ready for a hard-core new era where it’s “data first, talk later.”
Next Monday, A-shares and Hong Kong stocks will most likely open lower. Hong Kong tech stocks are especially sensitive. Keep your eyes on every number—because with every frame, it could turn into your profit or loss.
