WSJ’s Nick Timiraos says July’s US jobs report will be hard to interpret.
Evidence that the labor market has not re-accelerated could reduce urgency for
a next-month hike, but outcomes hinge on fresher inflation data. A drop in
unemployment will keep markets focused on price trends; whether price pressures
rise or fall will determine if more officials conclude they cannot meet the
inflation target with rates left unchanged. Two months of milder inflation would
strengthen the case to hold rates as a trend signal rather than noise; stronger
inflation would revive hawkish forecasts and could give officials favoring
further tightening a path to secure a pivotal fourth vote.
