The latest statement from Nick Timiraos, the voice tube of the Federal Reserve, has poured cold water on the market and put an end to the easy mode of the US stock market. Core idea: The biggest concern now may not be inflation or unemployment, but the market's excessive belief that it will rescue the market. The pace management of interest rate cuts by the Federal Reserve has shifted from "guiding the market to believe in interest rate cuts" to "preventing the market from overpricing interest rate cuts". This implies three fundamental changes in the macro environment of the US stock market: The stage of 'lying down and winning' has passed In the past, the stock market rose not because companies made more money, but because people "expected" that the Federal Reserve would soon cut interest rates (release water). Now: Don't overthink it, whether or not there will be a rate cut in December is still uncertain (50-50 opening). This means that the good days of relying on fantasy interest rate cuts to drive stock prices up may have come to an end. The market is about to embark on a roller coaster ride In the past, the Federal Reserve would give a clear signal to everyone that 'I plan to do this next' (forward guidance), and the market was reassured. Now: There are differences within the Federal Reserve, and they are uncertain about the economy, employment, and prices. It has become crossing the river by feeling the stones again. Result: In the future, every time new employment or price data is released, the market will be repeatedly pulled between concerns of economic recession and reignition of inflation, amplifying fluctuations. Because no one knows what the Federal Reserve will think. 3. From macro level water release to whether enterprises make money The scariest thing is that the Federal Reserve is starting to whisper the word 'stagflation'. What is' stagflation '? It's "economic stagnation" (people are not making money)+"inflation" (prices are still stubbornly high). This is the worst combination. Economic stagnation hits corporate profits (E), sustained inflation suppresses valuations (P/E) Result: The market is forced to shift from not providing water by the Federal Reserve to companies making their own profits. In the context of valuation unable to expand, only quality stocks that can achieve unexpected profits and healthy cash flow can cross the cycle, while high valuation, high leverage, and strong cyclical sectors will face severe challenges. Summary: Powell's' blowing wind 'is a reminder to everyone not to dream of' the Federal Reserve will definitely come to save me 'anymore. The 'simple mode' of the stock market has ended, and the next step is to enter the 'difficult mode' of competing for 'real skills' and' resistance to volatility '. Summary: Nick's statement is a clear message to the market: Say goodbye to illusions, the Federal Reserve is no longer a definitive "savior". The simple mode of the stock market has come to an end, and the next step is to enter the difficult mode of competing for real skills and resisting volatility.