At 20:30 Beijing time, the much-anticipated US August CPI data was officially released. This is the most important inflation piece of the puzzle ahead of the Fed’s September rate-setting meeting, with global stocks, bonds, currencies, and gold all watching these figures.
Actual readings: All in line with market expectations
Headline CPI YoY 3.4%, MoM 0.4%
Core CPI (the Fed’s primary focus, excluding food and energy) YoY 2.4%, MoM 0.2%
Simply put: There was neither hotter-than-expected inflation nor more-than-expected cooling—a standard “neutral reading.”
Headline CPI rose mainly because higher crude oil prices drove up the energy component; core inflation remained sticky, neither worsening further nor showing a notable decline.
How should we view expectations for a Fed rate hike?
Before the data was released, the market priced in roughly a 71% probability of a rate hike in September. After the data came out, the probability remained in the 65‑70% range, with neither a sharp jump nor a cliff-like drop.
Core conclusion: A rate hike is still possible, but it is not a certainty.
This CPI report provided the Fed with neither strong evidence that it “must hike” nor sufficient grounds to “pause rate hikes with confidence.” The decisive factor has now shifted to next week’s September rate-setting meeting and its dot plot.
Immediate market reaction
When the data was released, US stock futures, Treasury yields, and the US Dollar Index did not see one-way surges or plunges, but 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. Instantaneous gains or losses do not indicate the final direction. It is advisable to wait 15‑30 minutes and then assess the trend once it stabilizes.
US Treasury yields: Narrow-range volatility, with no test of the 5% threshold;
US Dollar Index: Modest fluctuations, with no one-way trend;
Nasdaq futures: Neutral volatility, with no sharp trend-driven rise or fall.
Implications for investors
1. Do not treat a single month’s CPI as the sole basis for investment decisions
This data only shows that inflation remains sticky; it cannot directly predict whether US or A-shares will rise or fall.
Tonight is merely a “mid-game update”; next week’s rate-setting meeting statement and dot plot are the bigger variables.
2. Two risks remain
If inflation picks up again, rates remain high for longer, and growth stocks will continue to face pressure;
If inflation continues to cool, the market will trade on peak rates, giving risk assets an opportunity 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 pushing up inflation and put pressure on the Fed.
In closing
Tonight’s CPI was data that brought “neither surprise nor shock.” The market is now in wait-and-see mode. The focus ahead is on the Fed’s September rate-setting meeting, the dot plot, and officials’ comments on the subsequent interest-rate path.
Investors should avoid being swept up by short-term data-driven sentiment, remain calm, manage positions carefully, and wait for clearer signals.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.