Powell's Speech Outlook Before Friday: September Rate Cut Expectations Hard to Heat Up, This Week's Spot Suggestion is "Watch More, Act Less"

1. Two Core Possibilities of Powell's Speech

1. Low probability scenario (direct denial of interest rate cut): Clearly reject the expectation of a September interest rate cut and respond positively to Trump's related remarks.
The core reason for the low probability: Powell leans towards "technocratic" decision-making, relying more on data rather than direct policy confrontation, and his strong stance does not align with his academic style.
2. High probability scenario (data-driven statement): Uncertainty about whether there will be a rate cut in September, focusing on key economic data to release signals.
① Countering Trump's "employment weakness" perspective: downplaying the impact of the downward revision of non-farm data to avoid reinforcing expectations of economic weakness;
② Emphasizing that inflation has not met the target: Currently, inflation at 2.7% is still short of the 2% target, coupled with a rebound in PPI, suggesting that the current conditions do not meet the requirements for interest rate cuts.

2. Key conclusion: The probability of Powell being dovish is extremely low, and caution is needed with Spot.

① Style Support: Powell's personality is direct and focused on policy principles, and he has rarely released dovish signals in historical statements. The possibility of a tilt towards "hawkish/neutral" this time is very high.
② Spot trading advice: It is not advisable to enter the market this week, as the probability of a decline is greater than that of an increase. It is recommended to "watch more and act less"; if the relevant speech leaks in advance, the market may start a decline earlier.
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