A new week begins, with the interest-rate decision meeting as the main focus this week.

At present, major institutions are all convinced that rates will be raised this time, and the market is also trading on that expectation. Current conditions indicate that the probability of a rate hike is continuously increasing, but there are also many conditions suggesting that rates cannot be raised.

The pressure is now on Wash. Previously, I expected Wash to withstand the pressure, but this time, oil prices and both forward-looking data releases have leaned toward rate-hike expectations. I’m even starting to wonder whether Wash may actually raise rates.

However, there are several possible scenarios even if rates are raised. The rate-hike decision and the remarks at the subsequent press conference will have a major impact.

If rates are genuinely raised by 25 basis points in September, but the possibility of further hikes is played down, then the decline that has already been priced in will have limited room for a further pullback.

If, after raising rates by 25 basis points, expectations for further tightening are reinforced, the market will face sustained pressure.

Conversely, if pressure is resisted this time and rates remain unchanged, the market will rebound. However, if the press conference takes a hawkish tone and emphasizes that subsequent rate hikes may be delayed, that will also have an impact. But I think the probability of this is too low. If rates are not raised in September, they are even less likely to be raised in October, even though oil prices have surged this month.

Therefore, taking the market action into account, I estimate the probability ratio between a bottoming rebound and a sustained decline at 6:4. I’m more inclined to look for lows and take long positions. I expect Wash to maintain a hawkish stance verbally while keeping policy unchanged in action.