Market pricing remains close to a coin flip before the August producer- and consumer-price reports.
Market implied odds of a Federal Reserve rate hike this month have settled at just above a coin flip, with the odds of a hike this month at roughly 56%.
The move followed Federal Reserve Chair Kevin Warsh's hawkish leaning keynote at Jackson Hole on , which pushed hike odds up from roughly 30% beforehand. August nonfarm payrolls, released , added 162,000 jobs against a consensus estimate of about 55,000, with unemployment holding at 4.1%.
Inflation data takes over
The Producer Price Index for August is due Thursday at 8:30 a.m. Eastern, with the Consumer Price Index following Friday at the same time. Those two releases, not the jobs report already in hand, are what the market has consistently treated as the decisive inputs to the Fed's to meeting.
This week's other cost side developments complicate the picture. Oil has climbed toward $100 a barrel on Middle East supply disruptions, and the U.S. Canada tariff dispute escalated with new American import bans announced this week. Both add inflationary pressure independent of anything in Friday's CPI print.