Today's two events, one is the release of the non-farm payrolls data in the evening, if it is according to the current market expectations, it should be able to ease the pressure on the market, but more importantly, at 23:25 Beijing time this evening, Fed Chairman Powell will speak on the economic outlook.
This speech can be seen as the Federal Reserve's expectations for the current state of the economy, and I personally estimate that Powell will never say anything about a recession, and he threw the blame on Trump last time, saying that if inflation rises, it may be a problem with tariffs, and this time I estimate that it may be four contents:
1. The U.S. economy is slowing and the labor market is strong, but the overall economic level is stable.
2. Tariffs cause inflation to rise, but the increase in one-time tariffs has a limited impact on inflation.
3. The Fed does not see a recession, but it will take additional steps if retaliation from tariffs puts the economy at downside risk.
4. No evaluation of the path of interest rate cuts.
All of the above is my personal estimate and does not mean that it will happen.
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On Friday, Beijing time, it will be another monthly non-farm payrolls data, and the labor force data is still one of the data that the Fed focuses on, and the unemployment rate is the most influential in the non-farm payrolls data, with the previous value being 4.1% and the market expectation being 4.1%.
In fact, the unemployment rate data is back to the time when no matter what data is bad data, if the unemployment rate continues to fall, then for the Fed to reduce the expectation of interest rate cuts, after all, the decline in the unemployment rate represents the good economy of the United States, and it is true that the decline in the unemployment rate can ease the market's anxiety about the recession.
And if the unemployment rate rises, or even increases, although it is true that the probability of the Fed cutting interest rates will increase, the higher the unemployment rate, the greater the probability of economic problems, so even a rate cut will be considered an imminent recession.
So in fact, the best data is either unchanged or a small increase, such as 4.2%, which can send some signals to the Fed without panicking users, after all, the unemployment rate of 4.2% is still low.
After the unemployment rate, it is the employment data, and this data must be as big as possible, which also means that the current market environment is good and the economy is also good. Finally, there is the wage data, if this data is high, it is not conducive to the reduction of inflation, and if it is low, there is a worry that there will be problems in the economy.
So the difficulty of April is indeed rising.
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