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Macro

US August CPI Due Friday, Fed Rate Hike Odds at 70%

The US Labor Department will release August CPI data at 20:30 Beijing time on Friday. Economists expect headline CPI up 0.4% month-on-month and 3.4% year-on-year, with core CPI up 0.2% month-on-month and 2.4% year-on-year. CME FedWatch shows markets price roughly a 70% chance of a 25 basis point Fed rate hike in September, which would be the first increase since July 2023.

Original source

AI take

The gap between a 3.4% headline and a 2.4% core expectation is the real story here: it suggests the Fed's dilemma is an energy-driven headline rather than broad underlying pressure, which is why a hike is still priced as the base case. For crypto and RWA markets, the operative channel is the dollar and real yields into the September decision, not the CPI print itself. Whether the core reading holds near target while headline stays elevated is the open question, since that combination keeps the hike odds alive without resolving the policy path.

Generated by AI for reference only.

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