The Chairman of the U.S. Federal Reserve, Powell, is about to deliver an important speech, which the market is highly focused on, and all parties speculate that this speech may have a significant impact on the direction of the financial markets.

Currently, there are significant divisions within the Federal Reserve regarding interest rate reduction policies. Conservative members believe that the current interest rate level is appropriate and emphasize that inflation risks are more troublesome than employment issues, firmly opposing a rate cut in September. In contrast, moderate members take an open stance, believing that a rate cut may occur once this year, but this will depend on further changes in employment data.

Recent economic data has shown a contradictory trend. On one hand, the Purchasing Managers' Index (PMI) rose to 55.4, reaching an 8-month high, indicating a relatively stable short-term economic condition. On the other hand, the number of unemployment claims suddenly increased by 235,000, signaling clear signs of weakness in the job market. This complex situation has led to a change in market expectations for a rate cut in September, with the probability of a rate cut dropping from 91% to 75%, and the likelihood of a 25 basis point cut being only 61%.

Analysts expect that Powell's speech this time may adopt a seemingly tough but actually flexible strategy. He may continue to emphasize inflation risks, but in reality, he might be paving the way for future interest rate cuts. Some opinions suggest that the likelihood of Powell taking this stance is about 60%, and a 25 basis point rate cut may be implemented in September.

Given the uncertainty of the current economic situation, investors should closely follow Powell's speeches and subsequent economic data to timely adjust their investment strategies. At the same time, they should also be wary of the risks that market fluctuations may bring and maintain a cautious attitude.