US stock markets rose while US Treasury yields declined after Federal Reserve Governor Christopher Waller indicated he would support holding interest rates steady if economic data continue to show easing price pressures. The next decision will be influenced by August inflation data, due out next week. His remarks reduced expectations of a September rate hike and boosted risk assets, with the S&P 500 up about 1%, the dollar weakening, and Bitcoin rising above $80,000. The yen strengthened. Investors are now focused on the upcoming US inflation report for August, which could set the direction for monetary policy and global financial markets.
Waller's support for holding rates steady reduces expectations of a rate hike, implying lower policy rate path.
Reduced rate hike expectations lead to lower bond yields.
