August CPI data receives attention, with pressure on Federal Reserve policies and bond yields

The market is focused on the August CPI data, and the expected monthly increase of 0.2% or 0.3% in core CPI affects the Federal Reserve's policy choices for September, with the probability of interest rate hikes rising to about 60%. The situation in the Middle East has pushed up oil prices to $100 per barrel, coupled with pressure from tariffs and AI construction, and inflation risks continue. The US Treasury Department has raised the repurchase limit for long-term bonds to $6 billion, but the 10-year yield has risen to around 4.85%, indicating that the fiscal deficit and bond issuance demand still exert pressure on the market. Inflation, energy, and fiscal pressures jointly affect high interest rate cycles. (Source: Federal Reserve) AI interpretation: This CPI data directly determines the pace of the Federal Reserve's monetary policy shift. The stickiness of inflation and the rise in energy prices together constitute the core support for maintaining high interest rates. The rising market expectations for interest rate hikes reflect deep concerns about uncontrolled inflation. The pressure of fiscal deficit and high interest rate environment have formed a vicious cycle, further pushing up the yield of long-term bonds. This series of macroeconomic pressures forces the Federal Reserve to make a difficult choice between curbing inflation and maintaining financial stability.