WSJ Fedwatcher Jon Hilsernrath is out with his latest:
When Fed officials said in their July policy statement that they saw “significant underutilization of labor resources” – a signal of continued low interest rates – they were looking at an unemployment rate in June of 6.1%. The rate rose a notch to 6.2% in July and returned in August to 6.1%, the Labor Department said Friday.
The fact that unemployment hasn’t fallen since the July meeting —and that job growth slowed in August— suggests Fed officials won’t make big changes to their policy statement and the signal they’re sending about rates when they meet Sept. 16 and 17.
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Fed officials thus appear to be on a path to signal progress on the economy at their September meeting, but not enough to substantially alter their view of slack or the outlook for rates.
I don’t think Hilsenrath has any sources at the Fed but the dovish take could support risk assets and weigh on the dollar.
Update: This Hilsenrath article is from a couple days ago. Today he wrote about the phrase “considerable time’ in the statement.
