U.S. consumer prices rose 0.4% in August and 3.4% from a year earlier, in line with forecasts, while core CPI, which strips food and energy, rose 0.3% on the month against a 0.2% consensus. The Bureau of Labor Statistics released the file at 8:30 a.m. Eastern on 11 September. Gasoline accounted for more than one-third of the monthly headline jump. Core's annual rate eased to 2.4% from 2.5%. That split is the whole story: the longer-run measure cooled, the latest monthly pace did not. July's core was 0.2%. Governor Christopher Waller had said continued progress toward 2% would incline him to hold, and a hot report could lead him the other way. The monthly core overshoot sat between those tests. Traders did not wait. CME FedWatch moved from about 69% before the print toward 85% to 90% within minutes in some snapshots. By Tuesday, books sat in the high 80s to low 90s for a 25 basis point lift at 2:00 p.m. Eastern on 16 September, taking the funds rate from 3.50% to 3.75% into 3.75% to 4.00%. It would be the first hike since July 2023, the first under Chair Kevin Warsh, and the first since spot Bitcoin ETFs launched. See how Thursday's 5.4% PPI already lifted those odds toward 74%.
Bitcoin dipped to about $76,700 on the print and was back near $77,400 minutes later, a round trip of roughly $700. Some sessions later tagged $79,000 before settling near $77,300. The two-year yield rose about 6 basis points to 4.61%. The 10-year held near 4.95% that morning and later cleared 5%, a level last seen in 2023 on some prints and in 2007 on others depending on the tenor. The 30-year had already tagged 5.34% on the PPI week. Goldman Sachs flipped from a hold-through-2026 call to a September hike. JPMorgan pencils 25 basis points this week and another in December. Reuters said the table is set for Warsh's first tightening. He took the chair in May after President Donald Trump picked him with an expectation of lower rates. Jackson Hole's line still hangs over the building: inflation has to be moving back to 2% "clearly and at sufficient speed." Friday's tenth did not give him that cover.
Wednesday is a statement, a press conference, and a dot plot
The two-day FOMC opened this morning. The decision, the Summary of Economic Projections, and a 2:30 p.m. press conference land tomorrow. A hike that the market has already priced is not the whole event. The dots will show whether this is a one-off or the start of a path. Oil is still feeding the next CPI. Brent is near $107 after a Saudi East-West pipeline outage. That is not in August's gasoline line. It is in September's. Coupon-free assets, Bitcoin and gold included, will trade the statement more than the 25 basis points. A hold after this file would be the surprise. A hike with a hawkish SEP would not. Until 2:00 p.m., treat 90% as positioning, not a forecast. For the coin that has to live with that path, see Monday's $160 million ETF creation into the meeting.