Recently, the market has been fluctuating, and many frens can't sit still anymore—when it rises, they rush to chase it, and when it falls, they panic and play people for suckers, resulting in their principal getting smaller and smaller. To survive in this market, merely watching the market data is not enough; one must learn to understand those who truly influence the trends. For example, the Fed chairman Powell, behind every one of his decisions, lies a clear logical chain.

Today let's talk about a key point: why does Powell place more importance on employment data than anything else? Understanding this will help you grasp the root of many market fluctuations.

Looking back at the interest rate hike cycle in 2022, the timing was actually quite subtle. After the pandemic, in order to rescue the economy, the Fed initiated an unprecedented liquidity injection mode - zero interest rates combined with unlimited QE, with money flowing out like tap water. By the middle to late 2021, inflation signals were already very clear, with wages and prices rising in turn, and according to textbook logic, policies should have been tightened long ago.

But Powell really did not start raising interest rates until May 2022. The reason is simple: he was worried that tightening too early would damage the job market. Think about it, the economy had just crawled out of the pandemic, and companies were just starting to hire again. If borrowing costs suddenly increased at this time, many companies might directly downsize and lay off employees. For the decision-makers, ensuring that the common people can keep their jobs is more important than short-term price fluctuations.

But with such a delay, the side effects have emerged. Inflation is snowballing, and although it has now fallen to around 2.9%, it is still a distance away from the 2% target. It's like trying to cool down boiling water; it requires more effort. The leeway left initially to preserve employment has now become a resistance to curbing inflation.

So you see, the market trends are never random; policymakers are always balancing multiple objectives. Understanding these game rules is far more useful than studying candlestick charts every day.