美联储决议前夜：油价突破100美元、美国国债收益率突破5%，交易员今晚应关注什么

When oil prices climb back above $100 and US Treasury yields break above 5% again, the market is reassessing whether the Fed will tighten policy once more?

Recent rises in energy prices and the rebound in inflation pressure have rapidly changed interest rate expectations.

A market that had previously focused more on when the Fed would ease has begun to discuss again whether rate hikes are needed and how long high rates will last.

This has also noticeably raised the importance of this week's FOMC meeting.

At 2 a.m. Beijing time on September 17, the Fed will announce its latest rate decision and simultaneously update its economic projections.

For traders, what is truly worth watching at this meeting is not just the final rate number, but the Fed's latest judgment on inflation, energy prices, and the future interest rate path.

Why has this Fed meeting suddenly become more important?

The change first comes from inflation. The latest US August CPI rose 0.4% month on month and 3.4% year on year, with gasoline prices up 3.9% in the month, contributing more than one-third of the overall CPI increase for the month.

At the same time, supply risks brought by the Middle East situation continue to push energy prices higher.

As of September 15, Brent crude had risen to around $107/barrel.

Stronger inflation data combined with rising oil prices also quickly changed the market's judgment on this meeting.

Previously, the market discussed more whether the Fed would continue to hold steady, but the latest Reuters survey shows that 85% of surveyed economists expect a 25 basis point rate hike this week, raising the federal funds rate target range from the current 3.50%—3.75% to 3.75%—4.00%.

In fact, at its July meeting the Fed already made clear that inflation remains above the 2% target, and supply shocks such as energy are also pushing up some prices.

Therefore, the question this meeting truly needs to answer has become whether inflation pressure is sufficient to make the Fed restart rate hikes, and how long tightening policy may still last?

Why has the 10-year US Treasury yield broken above 5% again?

Changes in rate expectations have already been reflected in the bond market in advance.

On September 15, the US 10-year Treasury yield briefly rose above 5.021%, breaking through the vicinity of the October 2023 high and entering a high range not seen since 2007.

The logic behind this is not complicated.

Rising oil prices increase inflation pressure, and inflation risk in turn strengthens market expectations for further Fed tightening.

In this situation, bond prices come under pressure and yields rise accordingly.

The 5% 10-year US Treasury yield is worth watching because it affects more than bonds themselves.

As an important global long-term interest rate reference, persistently high US Treasury yields will further affect corporate financing, housing loans, stock valuations, and global capital flows.

So after this FOMC meeting, whether US Treasury yields can continue to stay above 5% will also become an important signal for observing how the market reprices rate expectations.

What is most worth watching in this Fed decision?

If a rate hike has already become the market's mainstream expectation, then whether a hike is ultimately delivered may not necessarily be the most important information.

First, economic projections and the future interest rate path are worth watching.

The September meeting is a quarterly meeting with a Summary of Economic Projections (SEP), and the Fed will update its judgments on economic growth, unemployment, inflation, and the policy rate.

Traders especially need to watch two questions:

Will future rate expectations continue to be raised? How will the Fed assess the impact of energy prices on inflation?

If the Fed believes that current inflation pressure still requires further tightening, the market may continue to raise expectations for subsequent rate hikes.

Conversely, if the Fed raises rates but remains cautious about the next policy step, then the hawkish expectations already priced in by the market may also be revised.

Which market reactions can traders watch?

For EagleTrader traders, several markets can be closely observed after this decision.

The US dollar index as well as EUR/USD and USD/JPY can directly reflect the market's reassessment of the US interest rate path;

For gold, changes in the US dollar and US Treasury yields need to be watched at the same time; crude oil remains under the dual influence of geopolitical risks and the high interest rate environment.

The US 10-year Treasury yield may be one of the most direct indicators for judging how the market actually understands this meeting.

If the information released by the Fed is more hawkish than market expectations, high interest rate expectations may be further strengthened;

If the policy stance is not as hawkish as the market had bet on, it may trigger another round of expectation revisions.

So as the Fed decision is about to be announced, rather than judging in advance which direction the dollar, gold, or crude oil will definitely move, it is better to watch whether a new 'expectation gap' emerges between the final policy announced and the expectations the market has already priced in.

This may also become key to the repricing of the dollar, US Treasuries, and major global assets over the coming period.

This article is solely for EagleTrader international macroeconomic and market information sharing and does not constitute any investment advice.

Financial markets involve risks; please trade cautiously based on your own circumstances.