As Fed Chair Powell is about to speak at the Jackson Hole meeting, global financial markets are on high alert. The current economic situation presents a complex scenario: on one hand, July's PPI wholesale prices rose significantly by 0.9%, pushing up the overall price level; on the other hand, the job market shows signs of cooling, and this contradictory situation exacerbates the risk of stagflation.

Morgan Stanley analysts warn that Powell may disrupt market expectations. He may downplay the possibility of a 50 basis point rate cut in September, leaving room only for a 25 basis point cut, and may even be ambiguous about his stance on rate cuts. Notably, after the PPI data was released, market expectations for a rate cut in September have dropped from 100% to 85%, highlighting the fragility of the market.

Trump's attitude has also added complexity to the situation. On one hand, he is pressuring for interest rate cuts, while on the other hand, he is looking for alternatives to the Fed chair, which undoubtedly increases the political pressure on the Fed.

In this context, Bitcoin has become a potential variable in the market. Some investors are beginning to see Bitcoin as a hedging tool: if interest rate cuts become a reality, a large amount of capital may flow into Bitcoin, and its "anti-inflation" characteristics will become more attractive. In a stagflation environment, Bitcoin, due to its fixed total supply, is viewed as another hedging option beyond traditional stocks and bonds. Additionally, the policy uncertainty brought by Trump has made decentralized Bitcoin more favored by risk-averse capital.

However, the risks still exist. If Powell releases strong hawkish signals, such as hinting that there will be no interest rate cuts, Bitcoin and other risk assets may plummet significantly along with the overall market.

The future market direction will mainly depend on three key factors: first, the PCE inflation data released on August 30, which is a more closely watched inflation indicator by the Fed, and its performance may directly affect policy direction. Second, the policy moves of Trump; if he intensifies tariff threats, it may further exacerbate stagflation risks. Finally, on-chain data from the crypto space is also worth paying attention to; if there are signs of accumulation in institutional wallets, it may suggest that there are opportunities for Bitcoin in the short term.

Investors who can accurately grasp these signals amid the market divergence triggered by Powell's speech are more likely to gain an advantage in the upcoming market volatility.