QCP: Fed Messaging Takes Center Stage as Inflation Stays Sticky

QCP said August CPI figures underscored persistent inflation pressures. Headline inflation held steady at 3.4% year over year, while core CPI rose 0.3% month over month, coming in above expectations as housing and energy costs continued to push prices higher. Markets broadly expect the FOMC to deliver a 25-basis-point rate hike this week. Crypto reacted only modestly to the data: Bitcoin briefly slipped to $76,700 before rebounding to $77,600, and Ethereum hovered around $2,500. ETF flows diverged. Bitcoin spot ETFs posted a weekly net outflow of $462.7 million. Ethereum ETFs recorded a net inflow of $196.9 million, helped by a $216.4 million single-day inflow on Friday. QCP noted the market narrative has shifted from "whether the Fed hikes" to "how it communicates the path ahead." Dovish forward guidance could support risk assets, while a dot plot pointing to a longer tightening cycle could weigh on crypto. Cross-asset sentiment also turned more complicated after a drone attack on Saudi Arabia's East'West oil pipeline lifted Brent crude above $107 a barrel. At the same time, AI-related stocks faced fresh headwinds, adding to the broader risk backdrop.