In brief
Fed governor Christopher Waller said on September 3 he would support holding rates steady if inflation keeps easing, per CNN Brasil and InfoMoney.
The remark pushed down the dollar and Treasury yields and sent gold up 2.84% per CNN Brasil and nearly 3% per InfoMoney, on a day when markets were pricing a rate hike.
The next day the 162,000 payroll reinforced hike bets and reversed part of the move, leaving the committee split ahead of the September 16 and 17 meeting.
What we know
04Verified fact
The next day, the August payroll reinforced rate-hike bets and reversed part of the move, per the event NEXO published on September 5.
It places the remark in the data sequence.
Sources[03]
Transmission to assets
Market read-through
For the currency, the Fed split between pause and hike keeps the dollar volatile until the September meeting, with direct effect on the real.
For gold, Waller's remark showed the metal's sensitivity to any sign of lower US rates.
Portfolio impact
01A pause signal pushes down the dollar and US yields; the next day's strong payroll pulled the other way.
Mixed: two opposite signals in two days.
What would change the view: The read changes with August US inflation and the September 17 decision.
Direction is an explanatory hypothesis, not a forecast or recommendation.
Next signals
What to watch
- US consumer inflation for August and other governors' remarks before the blackout period.
- The Fed decision on September 17 and the committee vote.
Limits of the reporting
What remains uncertain
- Coverage does not give Waller's full remarks or the forum where they were made.