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Macro

Huatai Securities: August Core CPI Overshoot Makes September Fed Hike a ‘Necessity’

Huatai Securities said in a research note that the stronger-than-expected August core inflation reading has made a Federal Reserve rate hike in September a “necessary option,” raising the credibility risk of holding rates steady. The August CPI data became the core variable for market pricing of the September decision, after a blowout August nonfarm payrolls report and oil prices breaking above $100 on rising Middle East tensions. Core services excluding housing showed no further slowdown momentum.

Original source

AI take

The note reframes the September decision: with core services ex-housing stalling and oil above $100, the burden of proof has shifted toward those arguing for a pause, not for a hike. That matters most for rate-sensitive corners of crypto and tokenized real-world assets, where the marginal buyer has been positioned for a peak in policy rates. The open question is whether the market prices a hike as a one-off insurance move or as a longer tightening path; the former is absorbable, the latter resets the macro backdrop for the whole sector.

Generated by AI for reference only.

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