Waller's Rate Hike Bets Cooled as Nvidia Buys Hugging Face for $18 Billion

US Federal Reserve Governor Christopher Waller's comments have caused a significant shift in market expectations. Speaking at a Reuters event, Waller stated that he leans towards holding interest rates steady this month if August inflation data shows continued cooling price pressures.

If the data confirms that inflation is still decreasing, Waller said he would support keeping the policy rate unchanged. However, if inflation comes in hot, he would consider raising interest rates.

Waller's remarks have reduced the odds of a quarter-point rise at the 15-16 September meeting to around 50%, from close to 70% previously. This change has led to lower global bond yields and a rally on Wall Street, with the yen gaining almost 2% against the dollar.

Meanwhile, Nvidia has agreed to acquire Hugging Face for approximately $18 billion, its largest outright acquisition to date. The deal puts Nvidia in control of a leading platform for open-source AI models, which host over 3 million models used by more than 18 million developers worldwide.