Fed Chairman Powell's remarks this week have once again brought a chilling effect to the market. He reiterated that the key indicators of the current economic situation have shifted from inflation to the unemployment rate. Although the unemployment rate has remained around 4.1% in June, with little change over the past year, the inflation rate has still not reached the 2% target. In this context, the Fed does not seem eager to adjust the Interest Rate policy, with a clear stance: maintaining stability is crucial at this time.

The market originally expected Powell to release some signals, such as whether there is a possibility of a rate cut in September. However, his remarks were ambiguous and did not reveal any substantial information. Even more disappointing for the market was that the inflation data released on Thursday exceeded expectations, completely dispelling the market's fantasies about a rate cut.

In fact, the Fed is currently closely monitoring a key signal - whether the unemployment rate begins to rise significantly. As long as the job market remains stable and inflation is hard to suppress, they will not hastily cut interest rates. Powell's implication seems clear: the Fed will not ease monetary policy prematurely before issues arise in the job market.

This makes the non-farm payroll data and unemployment rate data for July, announced on Friday, particularly important. If the unemployment rate does indeed start to rise, the Fed may consider adjusting its policy direction. However, this also raises a question: by the time the Fed actually takes action, will market risks have already begun to concentrate and explode?

The current economic situation is quite tricky: inflation is hard to bring down, while employment remains too strong, putting the Fed in a dilemma. However, judging from Powell's attitude, they seem to firmly choose to continue fighting inflation and will not easily change direction, even though the market has begun to feel overwhelmed. This persistence may bring more uncertainty to the financial markets, and investors need to closely monitor subsequent economic data and the Fed's policy direction.