Truth Serum

On July 29 the Federal Reserve held rates at 3.50 to 3.75 percent. It was not a quiet hold. Three voters dissented, and all three wanted a hike.

Nine days later, payrolls printed negative 23,000.

So Wednesday at 8:30 in the morning is the scorecard. If July inflation runs hot, the three dissenters had the better read, the hold starts to look like a mistake, and a September hike goes from live to likely. If it runs cool, the committee threaded it.

Here is the part nobody on television will mention. There is a market where people are already betting real money on Wednesday’s number, and it is not pricing what the commentary implies.

CONTINUE READING for what that betting market is actually pricing, the numbers in Friday’s jobs report the headline buried, why the credit market is dead calm at the index level and screaming on a handful of specific borrowers, and the call for Wednesday morning. Join us beyond the paywall, if you have not done so already.