At 20:30 Beijing time, the highly anticipated US August CPI data was officially released. This is the most important piece of the inflation puzzle before the Fed’s September rate meeting, with global stocks, bonds, currencies, and gold all watching these figures.
Actual readings: All in line with market expectations
Headline CPI: 3.4% year-on-year, 0.4% month-on-month
Core CPI (the Fed’s key focus, excluding food and energy): 2.4% year-on-year, 0.2% month-on-month
Simply put: There was neither hotter-than-expected inflation nor more-than-expected cooling, making this a standard “neutral reading.”
The rise in headline CPI was mainly driven by higher crude oil prices lifting the energy component; core inflation remained sticky, neither worsening further nor showing a significant decline.

How should we view expectations for a Fed rate hike?
Before the data release, the market priced the probability of a September rate hike at approximately 71%. After the data came out, the probability remained in the 65‑70% range, with neither a sharp jump nor a cliff-like decline.
Core conclusion: A rate hike is still possible, but it is not a certainty.
This CPI report did not provide the Fed with strong evidence that it “must raise rates,” nor did it offer sufficient grounds to “comfortably pause rate hikes.” The real battleground has now shifted to the dot plot at next week’s September rate meeting.
Immediate market reaction
Just after the data was released, US stock futures, Treasury yields, and the dollar index showed no one-way surge or plunge, only modest pulse-like volatility.
Here is an important reminder: In the first 10 minutes after the data is released, repeated back-and-forth moves are normal. Intraday swings do not represent the final direction. It is advisable to observe for 15‑30 minutes before assessing the trend after it stabilizes.

Treasury yields: Narrow-range volatility, with no test of the 5% threshold;
Dollar index: Modest fluctuations, with no one-way trend;
Nasdaq futures: Neutral volatility, with no sharp trend-driven rise or fall.

Takeaways for investors
1. Do not treat a single month’s CPI as the sole basis for investment decisions
This data only proves that inflation remains sticky; it cannot directly predict whether US or A-shares will rise or fall.
Tonight’s report is merely a “mid-game update.” The Fed’s remarks and dot plot at next week’s rate meeting will be the bigger variables.
2. Two risks remain
If inflation picks up again, keeping rates higher for longer, growth stocks will remain under pressure;
If inflation continues to cool, the market will trade on peak rates, creating opportunities for risk assets to recover.
3. Oil prices are the hidden thread
A large part of August’s CPI increase came from higher energy prices. If crude oil remains elevated, it will continue to push up inflation and put pressure on the Fed.

In closing
Tonight’s CPI was a “neither surprising nor alarming” report. The market is now in wait-and-see mode. The focus ahead will be on the Fed’s September rate meeting, the dot plot, and officials’ comments on the subsequent rate path.
Investors should avoid being swept up by short-term data-driven sentiment, remain calm, manage their positions, and wait for clearer signals.

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