BlockBeats reported on Sept. 3 that a Bitunix analyst, citing Bank of America’s latest assessment, said Friday’s U.S. August nonfarm payrolls report may influence rate expectations, but is unlikely to decide the Federal Reserve’s September policy path on its own unless the jobs data deteriorates in a clear way. The more important marker, the analyst said, is the CPI report due on Sept. 11.
That framing suggests the market’s recent rapid repricing of rate-hike odds is no longer driven only by whether the labor market is cooling. The central question is whether inflation can still convince the Fed that higher rates need to remain in place.
Caution over inflation has already shown up in bond markets
The analysis said this policy expectation is feeding directly into bonds. Long-dated U.S. Treasury yields remain elevated, while government bond yields in Japan, Germany and the U.K. have also moved higher. In that reading, high-rate pressure is no longer just a function of one central bank. It reflects the combined effect of fiscal deficits, debt supply and funding costs across major markets.
Equities and crypto face valuation pressure
For stocks and cryptocurrencies, persistently high long-end yields mean discount rates and financing costs are still rising. Even if investors continue to hold on to expectations around AI and economic growth, the room for valuations is being squeezed.
Gold, in the near term, is also being restrained by a stronger dollar and higher real yields. Still, the analyst added that if rising yields increasingly reflect fiscal stress and sovereign credit concerns, gold’s haven appeal could regain support.
Japan is another source of uncertainty in September
In Japan, the Bank of Japan’s Sept. 18 policy decision and intervention risk around USD/JPY 160 add another variable for global asset allocation. If the BOJ raises rates again, a narrower Japan-U.S. rate gap could strengthen the incentive for Japanese capital to return home.
The note also mentioned that Japan’s Government Pension Investment Fund, or GPIF, has recently revisited asset allocation, while domestic bond yields in Japan have climbed to multi-year highs. That could lead some investors to reassess how much they want allocated to overseas bonds and equities. The issue, according to the analysis, is not limited to the yen. It could spill into global bond markets through capital flows.
Three September variables are now in focus
The analyst said September will not hinge on one release alone. Markets are watching whether U.S. inflation, Japanese monetary policy and global bond supply-and-demand conditions together push funding costs even higher.
If CPI remains sticky, expectations for Fed tightening may stay elevated, and firm Treasury yields alongside a strong dollar would continue to constrain richly valued assets. If inflation cools in a visible way, lower long-end yields could ease valuation pressure on both equities and crypto.
For markets, the core question is shifting from when the Fed might cut rates to whether global capital has already entered a higher-cost phase in which investors are searching again for better risk-free returns.