Following the CPI release, investment banks are scrambling to revise their forecasts: the camp expecting no rate hikes this year has capitulated, while hawks are betting on three rate increases by January next year.
TD Securities has adopted the most hawkish stance, shifting from a forecast of unchanged rates for the full year to projecting three rate hikes by January next year. JPMorgan now expects one hike
CICC: Sticky inflation supports rate hikes; watch for hawkish signals
In August, the U.S. CPI rose 0.4% month-on-month on a seasonally adjusted basis (versus 0.1% the previous month) and 3.4% year-on-year (unchanged from the prior month). Core CPI increased 0.3% month-on-month (up from 0.2% in the prior month) and 2.4% year-on-year (down slightly from 2.5% the previous month), marginally above market expectations. The month-on-month rebound in inflation was driven primarily by higher energy prices, telecom rate hikes, and persistent inflationary pressures stemming from artificial intelligence. We believe this CPI report has already met the Federal Reserve's threshold for raising interest rates, and we therefore expect the Fed to hike rates by 25 basis points at its September 16 meeting.
Traders’ Red Lines Shift Online: A 10-Year U.S. Treasury Yield Above 6% Is the True Threshold for Personal Portfolios
This week, the yield on the 10-year U.S. Treasury briefly approached 5%, yet a Bloomberg survey indicates that traders are willing to tolerate yields above 6% in their own portfolios. The underlying rationale is that managing one's own capital carries no accountability for "being fired," resulting in a much higher risk tolerance than that of institutions managing other people's assets. Moreover, compared with the absolute level of Treasury yields, the pace of their rise has a more pronounced impact on the market.
The probability of a rate hike has surged to 86%, yet the U.S. dollar has not strengthened broadly, with weaknesses attributed to the euro, pound sterling, and yen.
This week, global markets have been repricing around inflation data and expectations of interest-rate hikes. In the U.S., August CPI rose faster month-on-month, oil prices remained in the triple
Once the Federal Reserve initiates a rate-hiking cycle, is a sequence of three consecutive hikes a reasonable expectation?
BMO anticipates consecutive follow-up hikes in October and December, with the cumulative impact of three hikes potentially erasing all anticipated rate cuts for 2025. Vanguard Group considers "three
快讯 | 美国8月CPI同比增长3.4%符合市场预期 交易员上调美联储加息预期
US Aug. CPI YoY +3.4% Vs +3.4% Forecast, Prior +3.4%
Will the Federal Reserve raise interest rates next week? The U.S. August CPI data will be released at 20:30 tonight, marking a pivotal moment for the markets.
① At 20:30 Beijing Time tonight, the U.S. Bureau of Labor Statistics is set to release the August CPI data, which will be the final "inflation puzzle piece" available to the Federal Reserve before its interest rate decision next week. ② As widely discussed by market participants recently, this week's inflation report is crucial for determining the Federal Reserve's actions at next week's monetary policy meeting.
U.S. Treasury yields approach the 5% "psychological barrier"! The global bond market sell-off intensifies as financial markets await tonight's 8:30 PM CPI "final verdict"
A global bond sell-off has pushed the yield on 10-year U.S. Treasury notes toward the critical 5% level.
Why Are Gold and Silver Down Today, 9/10/26?
U.S. equity risk premium hits lowest level since 2002; JPMorgan warns that the impact of rising interest rates will be more severe than in the past two decades
The risk buffer for U.S. equities is running critically low. JPMorgan warns that the equity risk premium of the S&P 500 has fallen to 2.1%, its lowest level since 2002 and more than 100 basis points
PPI data rattles Wall Street! Probability of a Fed rate hike in September rises to 70%
The latest data released by the U.S. Bureau of Labor Statistics on Thursday showed that rising energy prices last month have once again exerted inflationary pressure, which could increase the pressure on the Federal Reserve to raise interest rates at its meeting next week.
快讯 | 美国8月PPI同比增长5.4%超预期,美联储加息预期骤升
US August PPI YoY +5.4% Vs +5.3% Forecast, Prior +4.7%
Will the Federal Reserve raise interest rates next week? Two major inflation reports released over the next two days will set the tone.
① The Federal Reserve is scheduled to hold its monetary policy meeting on September 15–16, with significant uncertainty remaining regarding the central bank's actions. ② Over the next two days, two critical inflation data releases will set the tone for whether the Federal Reserve raises interest rates next week. ③ The upcoming Producer Price Index (PPI) and Consumer Price Index (CPI) data should provide clearer insights into whether U.S. inflation is reaccelerating or moderating.
The size of U.S. long-term Treasury bond repurchases may reach up to $6 billion, falling short of market expectations.
The U.S. Treasury has tripled the cap on its long-term bond buyback program to $6 billion, marking the latest effort by Treasury Secretary Bessent to curb rising long-term borrowing costs. However,
Why Are Gold and Silver Up Today, 9/9/26?
Express News | The U.S. Treasury Department announced the scale of its Treasury bond repurchase: up to $6 billion.
The U.S. Treasury will repurchase up to $6 billion in long-term bonds on Thursday. Earlier, the Treasury announced that, by November 4, the size of each individual long-term bond buyback would be at least doubled to $4 billion.
Expectations of a rate hike have never missed the 40% threshold; the Federal Reserve’s September rate hike may emerge as the “least bad option”.
The surge in non-farm payroll data has pushed the probability of a Federal Reserve rate hike in September to 60%, leaving Governor Warsh in a dilemma between "disappointing the market" and "disappointing Trump." Shenwan Hongyuan warns that since 2015, expectations of a rate hike exceeding 40% have never failed to materialize, and heightened market expectations for a rate hike are unlikely to subside significantly following the release of CPI data. If the Fed makes an exception this time, the term premium could suffer a backlash. However, if the rate hike proceeds without a substantial upward revision to the future path, the impact may be much milder than market expectations suggest.
Express News | “I am the house now; if you want to bet against me, go ahead,” Bessent warned markets not to short the yen against him.
U.S. Treasury Secretary Bessent has challenged traders attempting to short the yen, stating that he effectively possesses "insider information" when assessing market conditions. Bessent remarked, "Whenever someone says, 'Oh, the Treasury Secretary is taking a risk by doing this,' I think that is precisely my dream, because I hold asymmetric information." A former hedge fund executive, Bessent recalled several instances of his market interventions, including the joint purchase of yen with the Japanese government on July 31. At that time, the yen strengthened significantly, but gradually gave back those gains over the following trading sessions, partly because traders pointed out that the U.S. Treasury's foreign exchange intervention funds are limited. Bessent stated, "I am now the house, so when we intervene in the yen market, I have a fairly good sense of what actions the Japanese government, the Bank of Japan, and Japanese policymakers will take. And if you wish, you are welcome to bet against me."
Express News | Iranian media reported explosions near Kharg Island.
International gold and silver prices declined in the short term, with spot gold briefly falling below $4,360; Iranian media reported explosions near Kharg Island.
As expectations for Federal Reserve interest rate hikes intensify, UBS Group releases a 'buy and sell list': buy stocks on dips, while gold and other assets correct.
The probability of a Federal Reserve rate hike in September has risen to approximately 60%. UBS Group has released an investment strategy recommending that investors buy stocks on dips amid market volatility, capitalize on opportunities arising from rising medium- to long-term bond yields, and establish hedging positions when gold prices pull back.