橙子Joyce

Will the Federal Reserve raise rates next week? Over the next two days, two major inflation reports will set the tone!

① The Federal Reserve will hold its policy meeting on September 15–16. At that time, how the central bank will act still involves considerable uncertainty.

② Over the next two days, two crucial inflation data releases will set the tone for whether the Fed will raise rates next week;

③ The upcoming PPI and CPI data should reveal more clearly whether U.S. inflation is re-accelerating or easing.

Due to the Iran war driving oil prices ever higher, overall CPI is expected to show a month-on-month increase as high as 0.4%.

What Wall Street is really watching is core CPI excluding energy prices. This metric is believed to better predict the long-term trend of U.S. inflation. Economists expect that in August, core CPI will rise 0.2% month-on-month.

Typically, a 0.2% increase would be seen as modest—that is, not enough to prompt the Fed to raise rates. However, after inflation rate rebounded to above 3% earlier this year, the Fed is now facing greater pressure to act.

Over the past more than five years, the Fed has been trying to push inflation down to its 2% target, but it has consistently failed, making central bank officials increasingly anxious.

Last week, Fed Governor Michael Barr said that if inflation does not cool, the Fed should be prepared to raise rates. He warned that inflation has been above the target level for more than five consecutive years, creating a risk that price pressures could become entrenched.

Worth noting: there is no “magic number” in core CPI that can lock in the Fed’s policy direction—there are many variables involved.

If the month-on-month rise in August core CPI is 0.1% or lower, the Fed will most likely choose to hold steady. And if the rise reaches 0.3% or higher, a rate hike is basically confirmed. If core CPI rises 0.2%, uncertainty may continue to persist.

Will PPI data play an even more important role? Given that oil prices and tariffs continue to create inflationary pressure, tracking the Producer Price Index (PPI), which tracks wholesale production costs, may play a more important role in influencing Fed decisions than in the past.

Currently, the probability that the Fed will keep interest rates unchanged through September is 39.8%, while the probability of cumulative rate hikes of 25 basis points is 60.2%. The probability the Fed will keep rates unchanged through October is 28.3%, the probability of cumulative rate hikes of 25 basis points is 54.3%, and the probability of cumulative rate hikes of 50 basis points is 17.3%.

Underestimated Risks in the U.S. Midterm Elections?

The market is seriously underestimating the risk that the results of the U.S. midterm elections could be challenged, triggering political and legal disputes. At the same time, hedging costs on Wall Street have fallen to their lowest level of the year, and the implied volatility of S&P 500 put options for November has dropped below 15%, creating a low-cost window to buy protection early.

The probability that the election results could be disputed, or even spark political turmoil, is being severely underestimated by the market, and current pricing in the options market does not fully reflect this tail risk.

As the market calmed in August, the implied volatility of S&P 500 put options has fallen significantly from its July highs. The calmer the market, the cheaper protection becomes; but once election risk is truly priced into assets, volatility could rise rapidly, and the cost of hedging at that point would increase markedly.

The core logic is built on the current polling situation. Polls generally show Trump’s approval rating slipping, Democrats likely to regain control of the House, and Republicans expected to keep their Senate majority.

What the market is truly overlooking is not the election result itself, but the political and legal disputes that could emerge if the result is challenged. If the final outcome is unfavorable to Trump, the market is severely underestimating the likelihood that Trump would react strongly and challenge results in certain districts.

In that scenario, Trump may launch legal challenges to every “contested” district, delaying the certification process and triggering a wave of media coverage around disputes such as “what happens next” and claims that the election was “stolen.”

This political uncertainty could ultimately spill over into financial markets and drive volatility sharply higher. For markets, the most dangerous outcome is not necessarily that one side wins, but that the election result remains unconfirmed for an extended period, creating persistent uncertainty.

6

Meta targets the $300 billion AI agent boom—what advantages does Meta have?

Meta officially launched its personal AI agent, Muse, on Wednesday. Unlike traditional conversational AI, this assistant can independently carry out tasks on the user’s behalf—such as sending emails and booking travel. Initially, it is only available to users in the United States.

Muse can help users automatically complete a wide range of tasks, including online shopping, travel planning, ticket purchasing, arranging appointments/managing calendars, sending emails, and other use cases. While the agent can autonomously perform various tasks, for sensitive actions such as completing purchases/payments, users still need to verify before the final step is completed. Notably, Muse is a standalone application, independent from Instagram, Facebook, or other apps under Meta, and it currently will not share data with Meta’s advertising system.

As a leading tech platform with large-scale distribution capabilities and unique, massive datasets, Meta is well positioned to build personalized consumer agent products, improve product usefulness, and drive broad user adoption at scale.

This is also where Meta’s advantages and opportunities lie—its high focus on consumer adoption, along with the progress of integrating Facebook, Instagram, Messenger, and WhatsApp data into the Muse agent over time. If this is combined with the integration of other monetizable apps and personalized datasets—including Gmail—Meta could gain an advantage by building even more personalized agents and triggering new monetizable user behaviors.

The product’s entry pricing is another noteworthy advantage, and this advantage is closely tied to economies of scale. In terms of pricing, Muse offers a free version and also two subscription tiers: $20 per month and $100 per month.

For Meta, whether the Muse agents can drive incremental monetizable user behavior is one of the biggest potential “bullish options” that has not yet been factored into the stock price among Meta’s current valuation at 18x forward earnings per share for 2028. In other words, the market has not yet priced in the potential success of Muse into the stock’s valuation. Investors need to see user adoption rates and monetizable behavior before Meta’s share price can be revalued further.
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@只会呐喊的尖刀手
Analysis is very thorough, excellent!👍👍👍

Add to U.S. technology stocks and gold on pullbacks; U.S. Treasuries are relatively lower in the order of priority. Is the September FOMC meeting the key turning point?

Recent pullbacks may create opportunities to add positions on dips. The key is: when will the turnaround happen?

If the FOMC meeting on September 16 results in a rate hike, the market may not expect further hikes afterward. It could start pricing in that “bad news is already done,” causing stocks and gold to first fall and then rise after the meeting. If September brings no rate hike, near-term rate-hike risk is directly reduced. Since the Fed had previously been strongly hawkish but took no action, it may further weaken policy credibility—an outcome that is more favorable for gold.

Judging by the event timeline, after the September FOMC meeting could be a rebound window with relatively high risk-reward. It’s advisable to focus on capturing that period. At the same time, given uncertainty around the U.S.-Iran situation and economic data, the market may also start a rebound before the FOMC meeting (for example, if Trump quickly ends the conflict, or if U.S. CPI comes in significantly below expectations, or other major policy adjustments). Trading should therefore remain flexible. Since the bull-market trend for gold and U.S. technology stocks has not changed, there’s no need to mechanically wait for one specific time node. If the market shows a clear pullback over the next few weeks, you can also consider gradually increasing allocations to stocks and gold even before the Fed meeting.

(1) Gold is still the clearest overweight direction. Whether the Fed ultimately pivots toward easing to improve liquidity, or recent policy missteps damage the dollar’s credibility, the medium-term logic for gold has not changed. Pullbacks can instead provide opportunities to add.

U.S. stocks can also be added on dips, especially the tech sector. The AI industry trend has not reversed. Recent adjustments are more driven by pressure from capital and sentiment rather than a fundamental deterioration in earnings. If policy and liquidity pressures ease, high-valuation assets may actually have greater rebound resilience.

(3) Don’t rush to bottom-fish U.S. Treasuries. In September, AI financing needs and the risk of rate hikes may continue to disturb yields on the long end, and certainty for long-dated bonds is lower than for gold and stocks. Rather than betting on a rapid decline in long-end yields, the stance in this report on U.S. Treasuries is more neutral; it’s better to patiently wait for policy risk and supply pressure to ease.

Dollar-cost averaging on dips with investment targets such as $BNB , $BTC, $ETH, $SOL, $SPCX, $AAPL, $TSLA, $NVDA, etc., are all solid trading strategies.
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