BlockBeats report: On September 3, Bank of America’s latest analysis indicated that while the August non-farm payrolls report released on Friday may influence interest rate expectations, it alone is unlikely to determine the Fed’s September policy decision unless employment data shows a significant deterioration. The true key remains the CPI data to be released on September 11. This means that the market’s recent rapid repricing of rate hike probabilities is no longer solely focused on whether the labor market is cooling, but rather on whether inflation can convince the Fed that maintaining high interest rates remains necessary.
This policy expectation is directly reflected in the bond market. U.S. long-term yields remain elevated, alongside同步 increases in government bond yields across major economies such as Japan, Germany, and the UK, indicating that high interest rate pressures are extending beyond single central bank policies to become a result of combined global fiscal deficits, debt supply, and funding costs. For equities and cryptocurrencies, persistently high long-term yields mean discount rates and funding costs continue to rise; even as markets maintain optimism around AI and economic growth, they must confront the reality of compressed valuation space. Gold is likewise under pressure in the short term from a stronger dollar and rising real rates, but if higher yields primarily reflect fiscal and sovereign credit risks, its safe-haven attributes may regain support.
In Japan, the Bank of Japan’s policy decision on September 18 and the risk of intervention near the USD/JPY level of 160 have added further uncertainty to global asset allocation. If the Bank of Japan raises interest rates further, narrowing the U.S.-Japan yield spread could increase incentives for Japanese capital to flow back home. Additionally, the Government Pension Investment Fund’s recent reassessment of its asset allocation, combined with domestic bond yields reaching multi-year highs, may prompt investors to reevaluate their allocations to overseas bonds and equities. This is not merely a yen issue—it could also generate spillover effects across global bond markets.
Therefore, what matters in September is not a single data point, but whether U.S. inflation, Japan’s monetary policy, and global bond supply and demand are simultaneously driving up funding costs. If CPI remains sticky, expectations of Fed rate hikes may stay elevated, keeping U.S. Treasury yields and the dollar strong and continuing to pressure high-valuation assets. Conversely, if inflation shows clear signs of cooling, a decline in long-term yields could help alleviate valuation pressures on both equity and crypto markets. For markets, the central question is shifting from “When will the Fed cut rates?” to whether global capital has entered a new phase of higher funding costs and is seeking higher risk-free yields.