Recently, the Fed's monetary policy direction has attracted widespread attention in the market. Many investors are betting on a rate cut in September, but this expectation may face severe challenges.

From the perspective of inflation, the core inflation in July increased by 3.1% year-on-year and by 0.3% month-on-month. More concerning is the month-on-month surge of 0.55% in the 'super core inflation', which is closely related to wage growth. In this situation, a rate cut may further stimulate inflation, leading to uncontrollable prices.

Tariff factors cannot be ignored. Currently, the impact of the newly imposed tariffs has not fully transmitted to end prices. If commodity prices suddenly rise in the coming months, a rate cut by the Fed at that time could lead to a worsening of the inflation situation.

The stability of the job market is also an important consideration. The current unemployment rate is below 4%, and hourly wage growth is at 4.1%, which is far from the signs of an economic recession. Some members within the Fed believe that lowering interest rates in the context of a strong job market could trigger a rebound in inflation.

Powell's upcoming speech may break the expectations for interest rate cuts. He is likely to point out that key data from August won't be available until September, currently lacking a basis for rate cuts, and emphasize inflation risks in response to external doubts about policy.

The current market shows a clear divergence: retail investors are still betting on interest rate cuts, while large institutions have begun to take defensive measures. Historical experience indicates that in the game between institutions and retail investors, the latter often find themselves at a disadvantage.

For ordinary investors, it is essential to be wary of the volatility risks of interest rate-sensitive assets and avoid blindly following trends. At the same time, close attention should be paid to the inflation and employment data in August, as this will be crucial for decision-making. Maintaining rational thinking and not being swayed by market emotions is vital. Currently, the Fed lacks sufficient reasons for a rate cut, and investors should not be misled by expectations of rate reductions.

In this complex market environment, rational analysis and cautious decision-making are particularly important. Investors should consider all aspects comprehensively, rather than making investment decisions based solely on a single expectation.