BlockBeats News, August 7th, Wall Street Journal reporter Nick Timiraos stated that for the Fed, the July jobs report will be a difficult-to-interpret data point. The lack of evidence of a reacceleration in the labor market may dampen the urgency for a rate hike next month, but this still depends on better inflation data.

The continued decrease in the unemployment rate will keep the market focused on inflation data. Whether price pressures are rising or falling will determine whether more officials conclude they cannot sustain their inflation forecasts without a rate change. A modest inflation report will reinforce the case for keeping rates unchanged (as two consecutive months of modest data begin to show a trend rather than noise). Strong data, on the other hand, would again cast doubt on the forecasts and give dissenters an opportunity to vie for a fourth dissenting vote.