#Gate事件合约晒单挑战 Is Fed Governor Waller suddenly turning "dovish"? August CPI will determine the fate of a September rate hike, with market bets now at 50-50.

First, my personal view: The Fed will NOT raise rates in September!!!

Betting analysis:

Fed Governor Christopher Waller said Thursday that if upcoming data confirm inflationary pressures are cooling, he would favor supporting an unchanged interest-rate policy at the Fed's next monetary policy meeting. In prepared remarks for the Reuters NEXT event in Washington, he said, "My decision about what policy stance is most appropriate will be heavily influenced by the August inflation data," and "If inflation continues to make progress toward the 2% target, I would be willing to support keeping the policy rate at its current level." However, he also warned that a rate hike remains on the table: If August inflation data are "hot," he would consider raising rates at the September 15–16 meeting.
Waller noted that the Fed's current policy rate of 3.50% to 3.75% "is only modestly restrictive for aggregate demand," and that "inflation may not need to accelerate very much for me to support further tightening." Inflation remains high but is improving at the margin, while three-month core inflation has fallen significantly. Waller said inflation remains "well above" the 2% target but is "making slow and steady progress toward that goal."
He is more focused on the three-month core inflation trend—which has fallen from 4.76% in February to 3.05% through July—which he described as "quite significant improvement," with the pace of decline "encouraging." U.S. PCE inflation rose 3.7% year over year in July, while core PCE rose 3.3%. Waller believes year-over-year headline and core inflation data may overstate current actual price pressures, because "nonmarket services prices" account for about half of the core increase, with such prices estimated through statistical models rather than formed by actual market transactions.
He also played down concerns over tariffs and energy: The impact of higher import tariffs may have largely passed through to the economy, while energy price increases related to the Middle East war have not visibly spread to prices of other goods and services. Therefore, "at this point, I do not believe that elevated energy prices and tariffs will be important sources of persistent inflationary pressure."

However, upside risks remain: Energy prices have risen again and remain significantly above their levels at the beginning of 2026; the economy also faces pressure from AI infrastructure construction pushing up technology product prices, as well as the possibility of further tariff increases. Employment and growth remain solid, shifting the policy focus toward inflation. Waller said that given the overall resilience of the economy and the relative stability of the labor market, inflation is currently his primary policy concern. The U.S. has added an average of about 60,000 jobs per month through July this year, while the unemployment rate fell to a historical low of 4.1% in July. He expects real GDP growth in 2026 to be slightly above 2% and explicitly rejected the view that "AI investment should be deducted from GDP," saying AI infrastructure is part of real economic activity.

The market reprices: Rate-hike bets fall from 60% to 50-50
After Waller's remarks were released, traders lowered their bets on a rate hike this month. The market currently sees the probability of a September Fed rate hike as slightly above 50%, down from about 60% previously; another source said the CME tool showed a rate-hike probability of about 50.4%. Expectations for a hike had previously been pushed higher after Chair Kevin Warsh sent a hawkish signal at the Jackson Hole annual symposium. The next two key data releases will determine the outcome. Ahead of the September meeting, the main inflation data the Fed will receive are CPI and PPI, scheduled for release next week; August CPI will be released on September 11 and is viewed as the key variable determining Waller's voting stance. In addition, August employment data will be released earlier, on Friday, September 4. For the market, Waller delivered a "dovish pause signal" rather than a shift toward rate cuts—he still retains the option of raising rates, and everything depends on whether August inflation picks up again.