Tonight’s CPI report could directly determine whether expectations for a September rate hike can hold.

The latest nonfarm payrolls report had already cooled noticeably. Employment unexpectedly declined in July, while the May and June figures were also revised sharply lower. Market expectations for a September rate hike had already begun to weaken. What now needs to be confirmed is whether inflation has started to pick up again.

At present, the market is broadly focused on two scenarios:

If both headline CPI and core CPI continue to cool, the combination of “weaker employment + falling inflation” will further reduce the probability of a September rate hike. The dollar and Treasury yields could remain under pressure, which would be relatively positive for risk assets such as BTC and ETH.

But if core inflation comes in significantly above expectations tonight, the situation will be completely different. The market could once again trade on the theme of “sticky inflation,” expectations for a September rate hike could heat up again, and the dollar and Treasury yields could rise, putting renewed short-term pressure on risk assets.

So what is really worth watching tonight is not simply whether CPI rises or falls, but whether it changes the market’s pricing of the policy path for September.

For the crypto market, tonight will likely be another period of heightened volatility. Before the data is released, I would rather make fewer directional bets and wait for the market to reveal the answer.#CPI数据前夜，押注还是观望 @Gate 广场