Last month, were you still dreaming of interest rate cuts? Once Powell spoke, the dream was over.

His statement "there is no automatic rate cut" left the market stunned—bets on a rate cut in December plummeted from 70% to just over 20%. Even more severe was the following statement "making decisions in the fog"; it sounds humble but is actually a clear warning: don’t expect any certainty in policy.

Reality is indeed quite face-slapping. The Fed has already cut rates three times this year, yet the federal funds rate is still stuck in the "constrained" range of 3.75%-4.00%. Powell said whether to cut in December "is not yet determined," and Franklin Templeton is even more extreme, directly predicting that the bottom of this round of rates might be above 3.5%. The meaning is very clear: high interest rates are not a temporary measure, but rather a "new roommate" that will be living with you.

When the liquidity tightens, various assets immediately reveal their true nature. The SOFR rate in the U.S. repo market occasionally spikes over 4%, and the spread with the federal funds rate has widened to 17 basis points, leading to direct liquidations in leveraged positions. The Nasdaq has evaporated 8.5% in half a month, and Bitcoin is even worse, plummeting from $115,000 all the way down to $84,000, a drop of more than a quarter.

Do you see clearly? The rise of US stocks, which was propped up by borrowing for buybacks, now has financing costs that are outrageously high, and companies have no money left to continue playing; as for cryptocurrencies, there was originally no cash flow to support them...