Wall Street Journal

Jensen Huang stated at the G20 Technology Summit that NVIDIA will "invest nearly $1 trillion in U.S. infrastructure within this year alone." He likened AI to public infrastructure such as water and electricity, calling it "the greatest equalizer," and emphasized that "every country needs to build infrastructure to support its own economy." He also urged countries not to let fear of AI dominate public opinion, stating that being "left behind" is the worst outcome.

The Trump administration's "equity-for-subsidy" strategy has significantly boosted individual stocks like Intel and MP Materials, but the surge has mostly been a brief spike followed by a rapid decline. As the midterm elections approach, if the Democrats regain Congress, they will initiate congressional hearings that could severely impact the stock prices and brands of related companies; meanwhile, shareholder lawsuits are questioning the legality of the Chip Act's authorization, and a victory in these lawsuits could shake the entire stock portfolio.

The "New Federal Reserve News Agency" summarizes that the Fed may not have finished its fight against inflation. The key point of Waller's speech is that financial conditions are not restrictive, and inflation improvement is still insufficient. He did not provide a specific policy path or clarify whether he supports a rate hike in September. The short end of the U.S. Treasury market suggests a rate hike, while the long end remains more calm. Wall Street has not reached a consensus on a mandatory rate hike in September. Barclays and Societe Generale expect rate hikes in September and December this year. Industry insiders believe that Waller suggests the market should be prepared for a rate hike, but investors want GPS, and he only provides a compass. He still deliberately refuses forward guidance, saying a lot but providing no substantial content.

Nick Timiraos from the "New Federal Reserve News Agency" believes that Bessenet's announcement to at least double the repurchase of long-term government bonds aims to lower the long-end yields that have reached a 19-year high, coinciding with the time when the Federal Reserve may need to tighten financial conditions. If the intervention is successful, it will lead more FOMC officials to favor interest rate hikes. Coupled with Bessenet's previous interventions in the yen, personnel changes at the Atlanta Fed, and involvement in monetary policy, the historical boundaries between the Treasury and the Federal Reserve are being tested from multiple directions.

Bank of America believes that under the backdrop of the Treasury increasing the repurchase of long-term bonds and the dollar being under pressure, if Waller can clearly signal anti-inflation measures and the possibility of restarting interest rate hikes when necessary, it will help stabilize the market and flatten the yield curve; conversely, if he avoids policy statements, the yield on 30-year U.S. Treasuries may test the high of 5.5%, and the dollar will also face a new round of downward pressure.

Bessenet's expansion of long-term bond repurchases has failed to effectively suppress U.S. Treasury yields, instead giving rise to "currency devaluation trades" in gold and Bitcoin. Market focus has shifted to Federal Reserve Chairman Waller's speech at Jackson Hole—if he cannot provide clear signals regarding the inflation path, the sell-off of long-term U.S. Treasuries may intensify. A 5% yield on the 30-year bond is a key threshold, and Waller's statements will be the most important variable this week.

Waller will deliver his keynote speech for the first time at Jackson Hole on August 28, Eastern Time, but it has not yet been decided whether he will discuss the macroeconomic "big picture" or directly provide guidance for the policy path from September to December. This uncertainty means that the market's sensitivity to changes in wording may significantly increase. During the conference, about five Federal Reserve officials are expected to give media interviews, and attention should be focused on the continuous statements of these officials. Goldman Sachs believes that Jackson Hole has historically amplified foreign exchange volatility, but the dollar does not have a stable one-way direction.

Goldman Sachs' report points out that AI is moving from "answering" to "executing," with industry competition shifting towards workflow control. The key to the implementation of agents lies in controllability and the division of responsibilities, with workflows that have clear boundaries and verifiable results prioritized for automation. The model market is heading towards specialization: cutting-edge models dominate high-value tasks, while open-source models handle large-scale inference. At the same time, world models drive AI into the physical world, which is expected to give rise to a new growth curve in computing power, with demand potentially increasing 24 times in the next five years.

Bessent stated that the Treasury has a powerful toolbox and hinted that the scale of a one-time long-term bond repurchase could exceed the announced $4 billion. He emphasized that long-term bond yields do not reflect the fundamentals, particularly noting the lack of liquidity in 30-year U.S. Treasuries, and announced that a new fiscal consolidation plan will be unveiled later this week or early next week. Meanwhile, Bessent mentioned that a press conference will be held next Monday to elaborate on the action plan regarding Iran, stating that the U.S. will impose the "harshest" sanctions in history, and if maximum economic pressure is applied, it is unlikely that large-scale military action will need to be restarted.

The Nasdaq 100 index futures fell by 0.5%. The decline in U.S. long-term bonds widened, with the yield on 30-year Treasury bonds rising by 6 basis points to 5.25%. Spot gold fell by 1.0% during the day, reported at $4477.33 per ounce.