Bitget CFD Chief Analyst: Waller's hawkish speech raises expectations for "higher interest rates to last longer," making the dollar and U.S. Treasury yields key to the market

Bitget CFD Chief Analyst Lewis Huang stated that the hawkish remarks made by Powell at the Jackson Hole global central bank conference have shifted the market's focus from whether there will be a rate hike in September to the possibility that the Federal Reserve may maintain high interest rates for a longer period before inflation clearly falls back to the 2% target, and even retain the option for further tightening of policies.

Lewis Huang pointed out that if subsequent CPI, PCE, and employment data continue to be strong, the U.S. 2-year Treasury yield and the dollar index may remain strong, putting continued pressure on gold from the dual forces of rising real interest rates and a strengthening dollar, which may also amplify the volatility of high-valuation tech stocks like the Nasdaq 100.

Conversely, if inflation significantly cools and the labor market weakens, the market may lower its rate hike expectations, leading to a decline in the dollar and U.S. Treasury yields, providing support for gold and growth stocks.

He added that besides the Federal Reserve's policy statements, traders should also pay attention to whether the U.S. 10-year Treasury yield is influenced by factors such as fiscal deficits, Treasury supply, and rising term premiums.

Before and after the release of major data, it is recommended to moderately control leverage and assess market direction based on the interrelationship between the dollar, U.S. Treasury yields, gold, and stock indices.