TechFlow news, August 20 — Chloe (@ChloeTalk1), author of the HTX DeepThink column and researcher at HTX Research, analyzed that U.S. July inflation data showed continued increases in service costs and tariff-related goods prices, with core inflation hitting a six-month high. The Producer Price Index (PPI) also grew beyond expectations. Corporate profit margins are under further pressure, indicating persistent inflation stickiness and presenting challenges for the Fed's policy path at its September meeting. Market expectations for rapid rate cuts may be overly optimistic.
Against this backdrop, investors are closely watching Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium this Friday. Julian Emanuel, Chief Strategist at Evercore ISI, described it as a major risk event. If Powell reiterates that "inflation remains the primary concern," markets could repeat the sharp decline triggered by the 2022 Jackson Hole speech. Even if Powell hints at a 25-basis-point rate cut in September, the denial of a 50-basis-point possibility would still leave short-term market pullback risks intact. Emanuel expects a potential 7% to 15% stock market correction before October, aligning with traditional seasonal weakness in autumn.
Despite strong U.S. corporate earnings and equities nearing all-time highs, underlying risks have increased due to stretched valuations, recurring inflation pressures, and divergent policy expectations. The S&P 500's current forward P/E ratio has risen to 25.5 times, reaching levels not seen since 2000. In this uncertain environment, some strategy firms recommend hedging risk by purchasing October put options on the Nasdaq-100 Index (QQQ) to guard against a potential market correction in the fall.
Overall, the crypto market is navigating a sensitive macro environment. Bitcoin has stalled at historical highs and entered a range-bound consolidation phase; Ethereum has performed well, but altcoins lack structural capital support. As uncertainty around the Fed's policy path grows, caution is warranted toward short-term optimism. Over the coming week, the Jackson Hole conference could become a key market bellwether, and investors should closely monitor signals from Powell’s remarks.
