Fed Whisperer: July Jobs Report Hard to Read, Inflation Will Set Rate-Hike Course

Wall Street Journal reporter Nick Timiraos, the journalist often dubbed the 'Fed whisperer,' said on Aug. 7 that the July employment report will be unusually hard for the Federal Reserve to decode. The labor market is showing no fresh signs of re-accelerating, which could take some pressure off the need to raise rates next month — but only if inflation data improve, Timiraos said. With the unemployment rate edging lower, market attention will stay on inflation. The key question, he said, is whether price pressures are rising or cooling. That will decide if more officials conclude that, with rates left unchanged, they can no longer defend their forecasts for reaching the inflation target. On the outlook, two consecutive months of mild inflation would point to a trend rather than noise, strengthening the case for holding rates steady. Strong data, however, would again raise questions about the Fed's projections and hand rate-hike opponents a chance to press for a fourth favorable vote.