The U.S. September CPI data was released, showing a 3.7% year-on-year increase—higher than the market expectation of 3.6%. What signals does this release convey?

Just finished a live broadcast—exhausting, but I’ll say a few words to ease everyone’s concerns. Who got hit by this CPI bullet? The U.S. September CPI has just been released. The figure isn’t terrible in absolute terms, but it’s sharp enough to sting the markets. Year-on-year: 3.7%, versus an expected 3.6%—0.1 percentage point higher. What’s truly alarming is core CPI: year-on-year at 2.6%, versus an expected 2.5%; month-on-month at 0.3%, versus an expected 0.2%. Everything came in above expectations—and critically, it’s the *core* components that overshot. Within inflation data, a slight uptick in the headline figure can still be blamed on oil prices; but when core inflation rises, it’s far harder to dismiss. It signals that upward pricing pressures have spread beyond energy—and penetrated deeper, stickier, and more persistent segments of the economy. For the Federal Reserve, this is the most uncomfortable scenario possible. As soon as the data dropped, markets immediately repriced. The probability of a rate hike in October surged from roughly 20% to 43.7%—more than doubling. Even more striking is the shift in longer-term expectations: markets now anticipate *three additional hikes* by the end of 2027. The 10-year U.S. Treasury yield climbed to 5.328%; the 30-year yield rose to 5.62%. Gold plunged to $4,118—a 1.4% drop; silver fell over 3%. NVIDIA, SK Hynix, and Micron were already down pre-market—and extended losses sharply after the CPI release. So the bottom line is simple: for global risk assets, this is bearish—and not just sentiment-driven, but a full-blown *repricing*-level negative shock. Why such heavy impact? Because this single data point simultaneously altered two key assumptions: First, it shattered the notion that “the hiking cycle is over.” Second, it pushed the question of “when will rate cuts begin?” even further into the future. Markets have never feared high interest rates per se—what they dread is *how long* those high rates will persist. Time’s value is most expensive in the denominator. The transmission path across asset classes is clear: U.S. Treasuries reacted most directly: yields rose, prices fell. Here’s a subtle nuance: short-end yields reflect policy expectations; long-end yields reflect inflation and fiscal outlooks. Now both ends are rising—indicating markets neither believe hiking has ended nor trust inflation will smoothly return to target. The U.S. Treasury yield serves as the global risk-free rate anchor. When that anchor lifts, valuations across *all* assets must be recalculated. The U.S. dollar gained support and strengthened. A stronger dollar exerts pressure on dollar-denominated assets—that’s the oldest transmission channel. Many found gold’s decline puzzling: shouldn’t high inflation boost gold demand? Not in the short term. Gold yields no income. Once risk-free returns climb above 5%, the opportunity cost of holding gold becomes prohibitively high. When safe-haven logic clashes with interest-rate logic, interest-rate logic usually wins—short term. This time, gold’s sharp drop reflects precisely that. Silver fell even harder than gold because it straddles two identities: half precious metal, half industrial metal. Higher rates suppress demand; its industrial exposure drags it down further—hence greater volatility. Oil is the most complex case. Geopolitical tensions persist, posing constant risks of supply tightening—but higher rates also dampen demand, and tighter financial conditions erode risk appetite.

Global markets plunge again under renewed rate-hike fears! Unexpected CPI heat triggers a sell-off: U.S. and Asian equities tumble sharply; Bitcoin plunges.

Macroeconomic uncertainty continues to intensify, triggering broad-based selling across global risk assets. Major U.S. indices closed lower across the board, with technology stocks and AI-chip stocks suffering especially steep declines. Beyond the rate-pressure stemming from the CPI surprise, growing market concern over AI-related financing risks added fuel to the fire—news of Anthropic’s slowing revenue growth further dented investor sentiment. The sell-off then spilled over into Asian markets, hitting South Korea and Japan hardest. South Korea’s KOSPI index plunged nearly 9% intraday—triggering its tenth circuit breaker of the year. Chip giant SK Hynix tumbled over 12% intraday; Samsung Electronics fell nearly 11%. Japan’s equity market also slumped sharply: the Nikkei 225 index briefly widened its intraday decline to over 5%, marking its largest intraday drop since April 2025. The crypto market was no exception: Bitcoin rapidly dipped toward the $80,000 level. According to CoinGlass data, total liquidations across the entire market reached $954 million within the past 24 hours—$878 million in long positions and $76.01 million in short positions. Long liquidations accounted for over 92%, reflecting a one-sided downward move. Rate博弈 ahead of midterm elections: Waller’s Bangkok speech captures market attention Facing renewed rate-hike panic, multiple Fed officials spoke out shortly after the CPI release. While acknowledging persistent inflationary pressures, they broadly signaled a preference for pausing action and continuing to monitor incoming data—sending the market a message that an imminent rate hike is unlikely. San Francisco Fed President Mary Daly stated that if inflation remains persistently above target, the Fed may still need to raise short-term rates further—but there is no need to rush into action at the upcoming FOMC meeting. She emphasized: “I don’t feel compelled to make decisions hastily with limited information. I believe we have sufficient time.” Chicago Fed President Austan Goolsbee expressed concern about the latest CPI data, noting that September’s print exceeded expectations and that price pressures were broad-based—including stubbornly high services inflation. He stressed that it remains unclear whether current rates are sufficient to bring inflation back to the 2% target, and thus favors waiting for more data before deciding on further hikes. Still, Goolsbee warned that if inflation remains at current levels over the coming months, the Fed cannot afford to stand by. Fed Governor Michelle Bowman likewise acknowledged that inflation remains above the policy target, but emphasized that monetary policy decisions must weigh all economic indicators holistically while remaining vigilant against emerging risks. She noted there is no urgent need for immediate action, and that the Fed retains time to observe evolving economic conditions and financial developments before charting its next policy step. Yet inflationary pressures remain unresolved, and market views on the Fed’s next move remain divided. All eyes are now on Fed Chair Christopher Waller’s upcoming speech in Bangkok on October 16—the focal point for global markets. By convention, the Fed enters its routine quiet period ahead of the FOMC meeting scheduled for October 27–28, during which officials typically refrain from public commentary on monetary policy.

US Core CPI Surpasses Forecasts, Strengthening Case for Fed Rate Hike

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US Core CPI rose 0.3% in October, surpassing expectations and reinforcing Federal Reserve rate hike prospects. Notable price increases were recorded in baby food, formula, and energy sectors.

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US Core CPI Surpasses Forecasts, Strengthening Case for Fed Rate Hike

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