Analyst: The employment report is mixed, leaning more towards hawkish

The yield on the two-year U.S. Treasury note surged more than 10 basis points intraday to a one-month high. Judging by the immediate rise in the two-year Treasury yield after the speech, the market reaction to Waller's remarks even exceeded that of Powell's Jackson Hole speeches in 2022 and 2023. The swaps market is now betting that the Federal Reserve may raise rates multiple times before July next year.

The "New Fed News Agency" summarized that the Federal Reserve may not have finished its fight against inflation. The key points in Waller’s speech were that financial conditions are not restrictive and improvements in inflation are still insufficient. He did not provide a specific policy path, nor did he clearly indicate whether he supports a rate hike in September. In the U.S. Treasury market, the short end signals a need for a rate hike, while the long end remains more steady. Wall Street has not reached a consensus that a September rate increase is certain. Industry insiders believe Waller implied that the market should not expect a rate cut in the near term and should be prepared for a possible rate hike. However, while investors want GPS-level guidance, he only provided a compass, deliberately avoiding forward guidance—he spoke at length without offering substantial content.