What to know

• Fed Governor Waller signaled openness to holding rates steady if inflation continues easing, shifting market expectations away from a September rate hike.
• Swap markets now price roughly even odds of a quarter-point hike, down from 70% probability earlier in the week.
• Asian stocks rose 0.3% while the yen strengthened 2%, its biggest one-day gain in over a month.
• Friday's U.S. nonfarm payrolls report will be key; markets could shift if inflation data proves stickier than expected.

“We repeat our call that the Fed is more likely to hold than hike in September, though we think it is close and will indeed turn on the next set of inflation data.”

Krishna Guha, Analyst, Evercore · Moneycontrol ↗ · Sep 3

Christopher Waller Fed GovernorKrishna Guha Analyst, Evercore