The United States' interest rate cut of 50 basis points has finally taken place, and global international capital has begun to become active. The Chinese stock market, previously labeled as uninvestable, has experienced an epic surge. However, at a critical moment, the United States released a non-farm payroll report that exceeded expectations, leaving global capital in confusion.

The day after the holiday, the Chinese stock market underwent adjustments. Then, on October 10th, the United States announced another important set of data: the September CPI, which also exceeded expectations, rising by 2.4% year-on-year. However, this is the lowest level of CPI in the United States since the end of the pandemic, and it also decreased by 0.1% compared to August, which seems not too bad. But the key issue is that the market expected a 2.3% increase, meaning that the September CPI data in the United States also exceeded expectations.

The non-farm data exceeding expectations indicates that the U.S. economy is recovering. However, the CPI exceeding expectations raises concerns about inflation in the United States, sounding an alarm for the country.

These two sets of data seem to tell international capital that the non-farm data exceeding expectations means the U.S. economy is not in decline and does not need an interest rate cut. Meanwhile, the existence of inflation in the United States poses certain risks, making an interest rate cut even less necessary. Both key indicators point to the United States not needing an interest rate cut in November.

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If only the reality were so simple, international capital would at least have a clear direction. However, along with the September CPI announcement, the number of initial unemployment benefit claims in the United States soared.

According to the data, the number of people applying for unemployment benefits in the United States last month increased by 33,000, reaching 258,000, marking the highest number this year.A dramatic scene unfolded as the U.S. non-farm data exceeded expectations, yet the number of unemployment benefit claims was soaring. What is the true state of employment and unemployment in the United States? This has left investors thoroughly confused.

Subsequently, the Federal Reserve's bigwigs also began to voice their opinions, turning the already chaotic market situation into an even more disorderly mess.

According to reports, on that day, the Chairman of the New York Fed, Williams, the head of the Chicago Fed, Goolsbee, and the Richmond Fed's Barkin all showed little concern about the rise in inflation data.

However, Raphael Bostic, the relatively moderate President of the Atlanta Fed, offered a different positive perspective: "In the near term, various data have been very unstable, so we might consider temporarily halting interest rate cuts in November. On this issue, I am completely open-minded!"

The contradictory data and the indecisiveness of Federal Reserve officials inevitably raise questions about what the Fed is up to.

Is the illusion of aggressive rate cuts shattered?

Whether to cut or not to cut seems to have become the main bet for investors in the next two months. Now, with the release of U.S. non-farm data and CPI, even though the number of unemployment benefit claims in the U.S. has surged, this is largely related to the dockworkers' strike.

Therefore, perhaps in November, the illusion of aggressive rate cuts may indeed be shattered, and this might be the outcome that Wall Street capital truly desires. Why?

As soon as the U.S. announced a rate cut, China followed with a policy of lowering interest rates and reserve requirements. Capital that was previously enjoying high interest rates in the U.S. financial system has become more active under the influence of U.S. rate cuts, observing where to go next. China's introduction of multiple policies, coupled with its status as the world's second-largest economy, has attracted a significant amount of capital.

For the U.S., which once raised interest rates, bearing high interest expenses, in an attempt to seize the wealth that China had accumulated over a decade, this has now inadvertently benefited China. Naturally, this is not a pleasant situation for the U.S.Therefore, on October 4th, when the non-farm data was released, international capital took a look and saw that the US economy was not in decline, and the US might not cut interest rates. What if it raises interest rates instead? Wouldn't that mean they could still earn interest? As a result, international capital was confused, wondering whether to withdraw from the US stock market and invest in the Chinese stock market, or whether to re-enter the US stock market.

According to the results, this data was quite effective because the Chinese stock market was extraordinarily lively on the first day after the National Day holiday. However, on the second day, it was like a deflated balloon, while three key indicators of the US stock market rose.

Especially those high-performing stocks represented by the technology industry, the increase was astonishing.

Now, with the release of the CPI data, the US seems to be more concerned about inflation.

Compared with the data, the 17-page minutes of the interest rate meeting released by the Federal Reserve on the eve of the CPI announcement were like a bombshell thrown into the market, causing everyone to panic.

In this densely packed meeting record, many key viewpoints actually questioned and disagreed with the 50 basis points interest rate cut that had already been achieved in September.

Many participants in the meeting not only reserved their attitude towards the last significant interest rate cut but also explicitly stated that they were only willing to accept a 25 basis points interest rate cut in the next few times, insisting that such an adjustment pace was the most suitable choice according to the law of economic development.

According to the data, the strong dollar seems to be gradually waking up.

It has to be said, the difference in data before and after the US interest rate cut, has it set a trap for the whole world?

 The Decisive Battle of Sino-American Financial Tug-of-War

On this issue, perhaps only the highest echelons of the United States are fully aware.

It is often said that the day the United States lowers interest rates marks the end of the Sino-American rivalry. However, currently, a covert battle for capital seems to be brewing between China and the United States.

Tomorrow, China's Ministry of Finance will hold another press conference, and the United States' critical non-farm data and Consumer Price Index (CPI) add uncertainty to the international financial markets.

For both China and the United States, the competition in the financial arena is not about annihilating each other but rather about securing more benefits throughout the process.

Now, we should bravely embrace some brand-new challenges, be mentally prepared for them, and then adjust our respective strategic layouts to break the stalemate.