Non-farm "super thunderstorm" explodes! Federal Reserve policy shift? Investment signals amid global market turbulence

According to Zhitong Finance APP, the recent "news" from the global financial market is more explosive than summer watermelons! The U.S. non-farm payroll data just released a "super thunderstorm," directly overturning market expectations — the employment data for the previous two months was slashed by nearly 260,000, making the Federal Reserve's policy direction a mystery, and global stock, bond, and currency markets collectively shook! What exactly happened? What impact does it have on investments?

1. How severe is the non-farm "thunderstorm"? Data directly "avalanche"

In July, non-farm employment increased by 73,000, which seems "not bad"? But the data for the previous two months was directly cut to the bone:

June was revised down from 147,000 to 14,000, and May was revised down from 144,000 to 19,000, totaling a reduction of 258,000! This is the most severe downward revision since June 2020 (during the pandemic)!

The unemployment rate rose to 4.248% (rounded to 4.2%, but just a step away from 4.3%), and the labor participation rate also declined... The market originally thought the U.S. labor market was "relatively stable," but this data revision directly exposed the truth of employment weakness — describing it as a "thunderstorm-level reversal" is not an exaggeration!

2. What caused the data plunge?

The U.S. Bureau of Labor Statistics (BLS) explained: "Seasonal factors recalculated + received more feedback." But those in the know understand that non-farm statistics are inherently "highly challenging" (low response rates from businesses/families in the current month make the data prone to deviation). Adjustments are common historically, but cutting 260,000 in two months left even the "veterans" dumbfounded...

Some even joked: "Is this just a statistical error, or...?" (Rationally speaking, it's likely statistical fluctuation, but the effect has already made the market "boil over"!)

3. Is the Federal Reserve about to "change the game"? Policy differences intensify!

Just before, Powell stated: "The labor market is solid, no rate cuts in July!" Shortly after, governors Waller and Bowman directly voted against, stating: "The market is slowing, we should cut rates to mitigate risks!"

Interestingly — Federal Reserve governor Cook suddenly resigned (his term was supposed to end next January), allowing Trump to appoint a new member six months early! This means: the "rate-cutting faction" within the Federal Reserve may expand, and policy differences have suddenly intensified!

Now, the Federal Reserve faces a dilemma: on one hand, "inflation hasn't met targets, we can't cut rates recklessly," and on the other, "employment is weak, the economy is cooling"... How will the policy proceed in September? It's uncertain!

4. Tariffs add fuel to the fire, is "stagflation" coming?

On one side, the non-farm data exploded, and on the other, Trump launched a new move: new tariffs raised the effective tax rate in the U.S. from 17.3% to 20.5%, which may become long-term!

High tariffs + weak employment + inflation that won't go down could lead the U.S. into "stagflation" (economic weakness + high inflation). This presents a "hellish difficulty" for the Federal Reserve: cut rates? Fear of inflation spiraling out of control; don't cut rates? Fear of the economy collapsing directly... The global economy's "tinderbox" has been ignited again!

V. Global Market Turmoil! Asset Prices in "Ice and Fire"

Data explosion, the market goes "crazy":

U.S. Treasury yields plummet (market bets on the Federal Reserve's urgent rate cuts);

The dollar falls sharply, oil prices drop (economic expectations worsen, demand weakens);

Gold surges (driven by both safe-haven demand and rate cut expectations);

U.S. stocks plunge (S&P and Nasdaq collectively decline, South Korean stock market crashes 4%)... Risk appetite declines significantly, and assets that had previously risen sharply begin to "repay debts," with clear signs of correction!

VI. What's Next? These Data Points Determine Life and Death!

Key data for August is clustered, each of which could influence the Federal Reserve's September decision:

August 5: Services PMI (to gauge economic vitality);

August 12: CPI (to see if inflation is cooling);

August 15: Retail sales (to assess consumer resilience)... Short-term market volatility will soar (trading becomes difficult), but there are three certain main lines to watch in the medium to long term:

1. The Federal Reserve's "dovish cycle" is hard to reverse

Regardless of whether there will be a rate cut in September, long-term easing is the general direction (economic weakness + inflation hard to meet targets). U.S. Treasury rates and the dollar index are likely to decline, benefiting gold and non-U.S. currencies.

1. U.S. stocks "correction ≠ crash," buying on dips is advisable

The U.S. economy is experiencing a "soft landing" but is unstable; if the fundamentals are sound, it is merely a "correction." Quality assets (leading tech companies, core consumer stocks) should be gradually accumulated on dips, as the win rate remains.

1. U.S. dollar credit is hard to restore, "de-dollarization" continues

Tariffs + policy swings make the trend of central banks "de-dollarizing" unstoppable. Gold and RMB assets will benefit in the long term and can serve as a hedge.

This non-farm payroll storm + tariff shock has exposed the fragility of the U.S. economy and left the Federal Reserve's policies "shrouded in fog." Short-term market volatility will intensify, but the medium to long-term trend is clear:

The Federal Reserve's easing cycle continues;

U.S. stocks correct but do not change the long-term logic;

U.S. dollar credit weakens, and non-U.S. assets rise. For ordinary investors, do not be intimidated by short-term fluctuations; focus on the main lines and accumulate logical assets on dips to navigate through volatility!

Risk Warning: The market has risks, and investment requires caution. This article is for information sharing only and does not constitute investment advice