Bitunix Analyst:Warsh Removes Forward Guidance—Markets Must Reprice Data,Rates,and the Cost of Capital

August 10. In July, the U.S. unexpectedly lost 23,000 non-farm jobs, marking the first negative growth since February of this year. Although the unemployment rate dropped to 4.1%, the cumulative non-farm data for May and June were significantly revised downward, indicating a weakening resilience in the U.S. employment market. This has made the Fed's policy trade-off between inflation and employment more complex, especially as recent official divergences on rate hikes have widened, and the risk premium of monetary policy will continue to be reflected in U.S. bond yields and U.S. dollar asset valuations.

At the same time, the Bank of Japan's summary of the July meeting released a stronger signal for rate hikes, with some committee members believing that a more flexible, and even more proactive, policy normalization approach should be taken. The weakening yen prompted a rare joint intervention in the forex market by Japan and the U.S., indicating that the exchange rate issue is no longer just a domestic currency policy topic for Japan but is gradually affecting U.S. bond holders, U.S. dollar liquidity, and global arbitrage trading structures. If expectations for further rate hikes in Japan continue to heat up, the cost of yen carry trades may rise, potentially exacerbating the volatility of overvalued, highly leveraged assets.

U.S. bonds are in another key position. Bernett has recently supported yen intervention, discussed the FIMA liquidity tool, and adjusted the wording of long-term bond issuance, all essentially aimed at reducing pressure on the long-end U.S. bond market. However, in an environment where fiscal deficits, inflation, and energy costs remain high, the support that the Treasury Department can provide is limited. What truly determines long-term yields is still the inflation path, Fed policy, and the market's pricing of U.S. fiscal sustainability.

The industry side presents a completely different picture. SpaceX, AI servers, HBM, and NAND demand remain strong, with corporate capital expenditure continuing to expand. However, following disappointing earnings reports from SanDisk and Western Digital, their stock prices have plummeted, reflecting that the issue is no longer just about "whether earnings are growing," but rather about whether companies can continue to exceed already very high market expectations. The core contradiction of the AI industry is shifting towards capital efficiency and valuation tolerance.

Therefore, what the market truly needs to observe this week is not a single data point, but rather whether the cooling of employment can offset the pressure of inflation and fiscal factors on long-term interest rates, and whether high capital expenditure in AI can continue to translate into cash flows substantial enough to support high valuations. The U.S. CPI for July, to be released on Wednesday, will be a crucial validation. If inflation remains sticky, weak non-farms may not necessarily bring sustained downward pressure on rates; conversely, if inflation and employment cool simultaneously, the pressure of high rates on global risk assets may have a chance of substantial relief.

Overall, global assets are still in an environment of "high fiscal demand, high capital expenditure, high cost of funds," and volatility and asset differentiation are expected to remain high.