Although the probability of a rate hike in October has been weakened to 31.6%, the risk has not been eliminated. Tonight's September ISM Manufacturing PMI serves as a warning.
Although the data is nominally weaker than the previous value and expectations, the detailed sub-items show:
Manufacturing growth has not significantly cooled, indicating the economy maintains resilient growth,
New orders have accelerated again, indicating future growth will continue to accelerate,
Employment has improved, with no obvious signs of cooling or recession in employment,
Input prices have suddenly surged sharply, with cost inflation reemerging.
Combining these sub-items leads to one conclusion — the Fed has room and reason to raise rates.
Of course, this data has not yet affected the probability of a rate hike in October, but it will become a potential data risk. If tomorrow's large nonfarm payrolls data shows employment growth continues, and next week's September CPI shows accelerating inflation, the probability of a rate hike in October will still be raised. #加息预期推迟，9月非农成下一关键
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