US inflation explodes, but Walsh reduces the probability of a rate hike in October to 15% The inflation data released by the United States for two consecutive days has exceeded expectations, with CPI at 3.7% year-on-year and PPI at 6.3% year-on-year. However, after Walsh's speech in Bangkok today, the market's bet on a rate hike in October has dropped from about 27% before the speech to around 15%. As inflation continues to rise, the Federal Reserve Chairman has not provided guidance for a rate hike in October, leading traders to lower their expectations for another rate hike this month. During the IMF annual meeting, Walsh said that since the September interest rate meeting, the performance of the world economy has generally met the expectations of the Federal Reserve. He also mentioned that the Federal Reserve had already withdrawn some of its easing measures a month ago, corresponding to a 25 basis point rate hike in September, raising the interest rate range to 3.75% to 4%. Walsh stated that he will continue to adhere to the practice of making decisions without prior notice based on economic, employment, and inflation conditions at the meetings in October and December. My understanding is that the market values its judgment on the current economy the most. The CPI and PPI have consistently exceeded expectations, and Walsh still believes that the economy is generally developing along the original expectations, without emphasizing the need for faster action in this speech. This makes traders more inclined to believe that the Federal Reserve can observe for a period of time after raising interest rates in September. 15% reflects the market's understanding of this rhythm. Walsh is also optimistic about the US economy itself, believing that the country is experiencing massive investment growth, and investment has expanded beyond AI. The resilience of the global economy is also stronger than he expected five or six months ago. At the same time, it is emphasized that achieving price stability remains the task of the Federal Reserve, and in his view, the joint response of central banks to inflation and tightening policies is a positive change. Today, Walsh has not provided any new guidance on interest rate hikes, further easing market concerns about another rate hike in October. The main expectation for the next interest rate hike is still in December. One @ Gate, trade more markets