Analyst: Washkewicz Revives Possibility of September Rate Hike, But Focus Remains on Nonfarm Payrolls and CPI

ME News reports that on August 29 (UTC+8), StoneX market analyst Fawad Razaqzada stated that Wash’s speech on Friday evening was considered notably hawkish. Wash said what the market expected him to say regarding forward guidance—that he does not believe in forward guidance—and therefore declined to pre-commit to a September rate hike. However, this did not prevent markets from speculating that a rate hike might once again be back on the table. On inflation, Wash emphasized that combating inflation remains a clear priority and provided a detailed discussion on the matter, though he also expressed confidence that core inflation is moving toward the Fed’s target. Overall, his remarks were more hawkish than expected. During Wash’s Jackson Hole speech, markets significantly repriced expectations for the Fed’s September decision, with the probability of a 25-basis-point rate hike rising from 30% to approximately 50%. Before the September Fed meeting, a non-farm payrolls report and a CPI inflation report are still due, along with some minor data releases. Under its new leadership, the Fed has become more data-dependent. Given that recent U.S. employment reports have consistently undershot expectations by a significant margin, any further signs of weakness could severely undermine market expectations for a September rate hike. (Source: ChainCatcher)