Raising interest rates by the Federal Reserve won't get more ships through the Strait of Hormuz, won't make refineries produce more diesel, or make farmers grow more corn. The transmission mechanism of monetary policy has its inherent limitations—interest rate fluctuations change the cost of capital and the credit environment, but cannot directly create a temporary disruption in the supply of goods. More broadly speaking, when price increases stem from supply constraints rather than overheated demand, raising interest rates by the central bank is not a reasonable response; it may even be a case of treating the symptoms rather than the root cause, deviating from the core of the problem. In fact, if the root cause of inflation is a supply contraction caused by short-term disturbances, raising interest rates by the central bank is not only not the right solution, but it also hinders the necessary actions to fix the problem. What is truly needed is investment to expand production, not tightening the monetary environment to suppress demand. In other words, the supply gap needs to be filled by physical means such as increasing production capacity, improving logistics, and repairing infrastructure. Monetary policy cannot fill the supply hole and may even make it harder to narrow the gap by suppressing investment. However, many commentators advocate that the Federal Reserve should raise interest rates in September, arguing that "inflation is far above the Fed's target!" It seems that as long as price readings are high, tightening tools should be used, without questioning the underlying causes of the readings. Unfortunately, most members of the Federal Open Market Committee (FOMC) also ignore the actual economic situation, focusing solely on the closely watched inflation data and the employment report, which is so inaccurate that it is almost worthless. In other words, policymakers tend to mechanically respond to "visible and easily cited" statistical readings rather than based on judgments of the true state of the economy; and the distortion of employment data itself weakens the premise of the "data-driven" narrative. Furthermore, Trump's pressure on the Federal Reserve has also had a negative effect. This is because, to maintain the appearance of institutional independence, even if some FOMC members favor rate cuts (currently none hold this position), presidential pressure could force them to the opposite. There is a subtle inverse mechanism here: the more external pressure there is, the more necessary it is to maintain an "unmoved" stance to prove independence, which may result in the premature exclusion of the rate cut option that should be debated. Thus, a situation arises where, regardless of the real causes of rising inflation or the optimal solution, the default logic of financial markets is that as long as economic data suggests further price increases or a strong economy, the likelihood of a Fed rate hike increases. This means that market pricing follows a highly simplified "data-policy" linear mapping, almost disregarding whether the causal chain behind the data supports tightening. Influenced by the latest news, the probability of a rate hike at the September 16th FOMC meeting in the federal funds rate futures market was 70% last Tuesday, fell to 50% on Thursday, and then rose again to 59% on Friday. The gold market is most sensitive to this fluctuation in the probability of a rate hike. This dramatic swing is a direct reflection of uncertainty: switching back and forth between two directions within a week indicates that the market lacks a stable judgment on the central bank's true intentions and the future data path. In other words, as of last weekend, the probability given by the federal funds rate futures market showed that the possibility of the Fed making a policy mistake by raising rates in mid-September was close to 60%. We believe that the Fed is unlikely to make this mistake, but if it does raise rates, it may trigger a deeper correction in the gold, stock, and foreign exchange markets: gold prices and the S&P 500 index will decline, and the dollar index will strengthen. The logic is that a rate hike strengthens the dollar and raises real interest rates, which often suppresses dollar-denominated gold and overvalued stocks, while driving funds back to dollar assets.